Walras-Keynes equilibria coordination and macroeconomics
No 1997051, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)
In decentralised market economies, supply-constrained equilibria may persist as coordination failures, sustained but not caused by price rigidities. This feature may be arbitrarily severe, even at prices com- patible with competitive equilibrium. The supply-constraints may originate in rational expectations. Some implications for macroeco- nomics are drawn. The possibility of coordination failures explains why organised labour may resist wage flexibility. These features are il- lustrated in elementary macroeconomic prototypes, like RBC or Barro- Grossman-Malinvaud prototypes.
Keywords: coordination failures; supply constraints; price rigidities; macroeconomics. (search for similar items in EconPapers)
JEL-codes: E00 (search for similar items in EconPapers)
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Journal Article: Walras--Keynes equilibria coordination and macroeconomics (1997)
Working Paper: Walras-Keynes equilibria coordination and macroeconomics (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1997051
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