Monetary and Fiscal Policy in a `Hartian' Model of Imperfect Competition

Neil Rankin

No 205, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Monetary and fiscal policy are introduced into a version of Hart's "Keynesian features" model of imperfect competition. Individuals' labour supply is exogenous, so, under perfect competition, output is always at the exogenous "full employment" level. Imperfect competition takes the form of Cournot-Nash quantity-setting trade unions, seeking to maximise their members' total wage income. Equilibrium with unemployment is then possible. In this case, fiscal policy (money-financed government spending increases) nearly always affects output, while monetary policy only does so if price expectations are not unit-elastic. Thus in Walrasian equilibrium, not only imperfect competition but also non-neutral money are needed for monetary effectiveness.

Keywords: Fiscal Policy; Imperfect Competition; Keynesian Model; Monetary Policy; Price Expectations; Walrasian Equilibrium (search for similar items in EconPapers)
Date: 1987-11
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=205 (application/pdf)

Related works:
Working Paper: MONETARY AND FISCAL POLICY IN A 'HARTIAN' MODEL OF IMPERFECT COMPETITION (1989)
Working Paper: Monetary and Fiscal Policy in a "Hartian" Model of Imperfect Competition (1989)
Working Paper: Monetary and Fiscal Policy in a "Hartian" Model of Imperfect Competition (1989)
Working Paper: Monetary and Fiscal Policy in a 'Hartian' Model of Imperfect Competition (1988)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:205

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=205

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().