Anticipations, Recessions and Policy: An Intertemporal Disequilibrium Model

Olivier Blanchard and Jeffrey Sachs

No 971, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper presents an intertemporal disequilibrium model with rational expectations, i.e. a model in which agents anticipate the future rationally, but in which prices and wages may not adjust fast enough to maintain continuous market clearing. Therefore, optimizing firms and households base their intertemporal plans on anticipations of both future quantity constraints and future prices. Such a model shows clearly that the effect of a policy depends not only on its current values but its anticipated path, After a presentation of the model and its basic dynamics, we therefore consider the effects of various paths of fiscal policy on the economy.

Date: 1982-08
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Published as Blanchard, Olivier J. and Jeffrey Sachs. "Anticipations, Recessions and Policy: An Intertemporal Disequilibrium Model." Annales De L'Insee, Vol. 47/48 , (December 1982), pp. 117-144.

Downloads: (external link)
http://www.nber.org/papers/w0971.pdf (application/pdf)

Related works:
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:nbr:nberwo:0971

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w0971

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().