Center for Economic Research, Department of Economics, University of Minnesota
A purpose of this paper is to fill a gap between the recent development
in the microeconomic analysis of quantity constraints and the conventional
disequilibrium macroeconomics where the Clower-Benassy effective
demand has been used. Although Gale and Svensson defined a concept of
effective demand with rigorous microfoundations, which the Clower-Benassy
effective demand lacks, their models do not provide with insights about
macroeconomic consequences, such as a well-known classification of quantityconstrained
equilibria: Keynesian unemployment, Classical unemployment,
and Repressed inflation. This paper will (i) characterize simple macroeconomic
framework with satisfactory microeconomic foundations; and (ii)
show that multiple types of stochastic rationing equilibria, given the set
of prices, are a very common phenomenon in contrast to the uniqueness in
the conventional models.
Honkapohja, S. and Ito, T., (1980), "A Disequilibrium Macroeconomic Model with Stochastic Rationing ", Discussion Paper No. 114, Center for Economic Research, Department of Economics, University of Minnesota.
Honkapohja, Seppo; Ito, Takatoshi.
A Disequilibrium Macroeconomic Model with Stochastic Rationing.
Center for Economic Research, Department of Economics, University of Minnesota.
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