Macroeconomic coordination failure under oligempory

Date

2002-08-01

Author

Gaygısız Lajunen, Esma

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Each sector of a multi-sector overlapping generations model is an oligempory with a given number of firms, oligopsonists in the sectoral (spatially differentiated) labour market and oligopolists in the sectoral (homogeneous) output market. When there is aggregate unemployment, and a firm raises wages beyond the local full employment level acquiring labour from neighbours, sectoral output supply becomes constant and the firm faces a flat output demand curve under constant returns to labour (upward sloping under decreasing returns). Multiple temporary equilibria and Pareto-ranked steady-state equilibria emerge; the associated sunspot equilibria exhibit counter-cyclical markups, inter alia.

Subject Keywords

Economics and Econometrics

URI

https://hdl.handle.net/11511/40946

Journal

Economic Theory

DOI

https://doi.org/10.1007/s001990100193

Collections

Department of Economics, Article

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Citation Formats

E. Gaygısız Lajunen, “Macroeconomic coordination failure under oligempory,” Economic Theory, pp. 93–112, 2002, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/40946.