Imperfect Competition and Macroeconomics: A Survey

Huw Dixon and Neil Rankin

No 636, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This survey outlines the general lessons of the recent literature on imperfectly competitive macroeconomies for the theory of monetary and fiscal policy. A general framework is presented which encompasses most of the existing literature. Although money is of itself neutral in these models, the presence of menu costs, expectations which are not unit elastic, or sectoral nominal rigidities can result in a welfare-improving role for monetary policy. Imperfect competition also enhances the scope for the beneficial influence of fiscal policy. We explore the possibilities for multiple Pareto-ranked equilibria and the role of increasing returns to scale.

Keywords: Fiscal Policy; Imperfect Competition; Macroeconomics; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E32 E52 E62 (search for similar items in EconPapers)
Date: 1992-05
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Citations: View citations in EconPapers (16)

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Related works:
Journal Article: Imperfect Competition and Macroeconomics: A Survey (1994)
Working Paper: IMPERFECT COMPETITION AND MACROECONOMICS: A SURVEY (1991)
Working Paper: Imperfect Competition and Macroeconomics: a Survey (1991)
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