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Imperfect Competition and the Keynesian Cross

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N. Gregory Mankiw

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Abstract

This paper presents a simple general equilibrium model in which the only non-Walrasian feature is imperfect competition in the goods market. The model is shown to exhibit various Keynesian characteristics. In particular, as competition in the goods market becomes less perfect, the fiscal policy multipliers approach the values implied by the textbook Keynesian cross.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 2386.

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Date of creation: Feb 1989
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Handle: RePEc:nbr:nberwo:2386

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Weitzman, Martin L, 1982. "Increasing Returns and the Foundations of Unemployment Theory," Economic Journal, Royal Economic Society, vol. 92(368), pages 787-804, December. [Downloadable!] (restricted)
  2. Olivier J. Blanchard & Nobuhiro Kiyotaki, 1989. "Monopolistic Competition, Aggregate Demand Externalities and Real Effects of Nominal Money," NBER Working Papers 1770, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Startz, Richard, 1989. "Monopolistic Competition as a Foundation for Keynesian Macroeconomic Models," The Quarterly Journal of Economics, MIT Press, vol. 104(4), pages 737-52, November. [Downloadable!] (restricted)
  4. Hart, Oliver, 1982. "A Model of Imperfect Competition with Keynesian Features," The Quarterly Journal of Economics, MIT Press, vol. 97(1), pages 109-38, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Luís F. Costa, . "Fiscal Policy in a Small Open Economy With Cournot Competition in the Non-Tradable Good Sector," Discussion Papers 97/17, Department of Economics, University of York. [Downloadable!]
  2. Ramón Torregrosa, 2008. "Macroeconomic effects of an indirect tax substitution," Journal of Economics, Springer, vol. 94(3), pages 199-221, September. [Downloadable!] (restricted)
  3. Luis Costa, 2004. "Endogenous markups and fiscal policy," Money Macro and Finance (MMF) Research Group Conference 2003 18, Money Macro and Finance Research Group. [Downloadable!]
    Other versions:
  4. Partha Sen, 2005. "Perfect Competition and the Keynesian Cross:Revisiting Tobin," Working papers 135, Centre for Development Economics, Delhi School of Economics. [Downloadable!]
  5. Huw D. Dixon, . "Modelling Market Power in Labour and Product Markets in a Dynamic Economy," Discussion Papers 00/20, Department of Economics, University of York. [Downloadable!]
    Other versions:
  6. Torben Andersen, 2005. "Is there a Role for an Active Fiscal Stabilization Policy?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  7. Emmanuelle Taugourdeau, 2002. "Imperfect Competition and Fiscal Policy Transmission in a Two-Country Economy," Open Economies Review, Springer, vol. 13(1), pages 47-71, January. [Downloadable!] (restricted)
  8. Tetsuya Nakajima, 2005. "A Simple Model of Keynesian Unemployment," Macroeconomics 0502024, EconWPA. [Downloadable!]
  9. Hassan Molana & Catia Montagna, 2005. "Aggregate Scale Economies, Market Integration, and Optimal Welfare State Policy," International Trade 0510002, EconWPA. [Downloadable!]
    Other versions:
  10. Luís F. Costa & Huw Dixon, 2009. "Fiscal Policy under Imperfect Competition: A Survey," Working Papers 2009/25, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.. [Downloadable!]
  11. Kaas, Leo & Madden, Paul, 2000. "Imperfectly Competitive Cycles with Keynesian and Walrasian Features," Economics Series 83, Institute for Advanced Studies. [Downloadable!]
    Other versions:
  12. Luis F. Costa, . "Multipliers and Capital: What is the role of Imperfect Competition?," Discussion Papers 99/14, Department of Economics, University of York. [Downloadable!]
  13. Jim Malley & Hassan Molana, 2000. "Monopolistic Competition, Efficiency Wages and Perverse Effects of Demand Shock," Working Papers 2000_20, Department of Economics, University of Glasgow, revised Feb 2001. [Downloadable!]
    Other versions:
  14. Luís Costa, 2007. "GDP steady-state multipliers under monopolistic competition revisited," Portuguese Economic Journal, Springer, vol. 6(3), pages 181-204, December. [Downloadable!] (restricted)
  15. Partha Sen, 2008. "Fixed Costs, The Balanced-Budget Multiplier And Welfare," Working papers 171, Centre for Development Economics, Delhi School of Economics. [Downloadable!]
    Other versions:
  16. Luis F. Costa, 2000. "Multipliers and Imperfect Competition: What is the role of Capital Depreciation," Working Papers 2000/03, Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.. [Downloadable!]
  17. Costa, Luís & Palma, Nuno, 2006. "Comment on "Productive Public Expenditure and Imperfect Competition with Endogenous Price Markup"," MPRA Paper 5143, University Library of Munich, Germany, revised 08 Jun 2007. [Downloadable!]
    Other versions:
  18. Martin Besfamille, 2008. "The relationship between tax evasion and tax revenue in Chang, Lai and Chang (1999)," Economics Bulletin, Economics Bulletin, vol. 5(15), pages 1-6. [Downloadable!]
  19. Kiminori Matsuyama, 1991. "Imperfect Competition," Discussion Papers 947, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  20. Christian Keuschnigg, 1998. "Investment Externalities and a Corrective Subsidy," International Tax and Public Finance, Springer, vol. 5(4), pages 449-469, October. [Downloadable!] (restricted)
  21. Neil Rankin, 2007. "Imperfect competition and the modelling of expectations in macroeconomics," Portuguese Economic Journal, Springer, vol. 6(3), pages 133-150, December. [Downloadable!] (restricted)
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