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Economic Fluctuations and Non-Neutrality of Money Based upon Imperfect Competition

In: Increasing Returns and Economic Analysis

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  • Xiangkang Yin

Abstract

In his early paper, Ng (1980) showed that the introduction of imperfect competition along in a standard macroeconomic model with profit maximization, no time lags, no transaction costs and/or friction could break the classical dichotomy between the real and the monetary sectors and make money possibly non-neutral. However, most of the literature in macroeconomics unfortunately misses this possibility of non-neutrality of money under imperfect competition and believes that Imperfect competition by itself does not create monetary non-neutrality … It is the combination of imperfect competition with some other distortion which generates the potential for real effect. (Dixon and Rankin, 1994, p. 178)

Suggested Citation

  • Xiangkang Yin, 1998. "Economic Fluctuations and Non-Neutrality of Money Based upon Imperfect Competition," Palgrave Macmillan Books, in: Kenneth J. Arrow & Yew-Kwang Ng & Xiaokai Yang (ed.), Increasing Returns and Economic Analysis, chapter 17, pages 383-400, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-26255-7_23
    DOI: 10.1007/978-1-349-26255-7_23
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    References listed on IDEAS

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    1. Dixon, Huw, 1987. "A Simple Model of Imperfect Competition with Walrasian Features," Oxford Economic Papers, Oxford University Press, vol. 39(1), pages 134-160, March.
    2. Blanchard, Olivier Jean & Kiyotaki, Nobuhiro, 1987. "Monopolistic Competition and the Effects of Aggregate Demand," American Economic Review, American Economic Association, vol. 77(4), pages 647-666, September.
    3. Ng, Yew-Kwang, 1992. "Business Confidence and Depression Prevention: A Mesoeconomic Perspective," American Economic Review, American Economic Association, vol. 82(2), pages 365-371, May.
    4. Ng, Yew-Kwang, 1992. "Business confidence and depression prevention : A micro-macroeconomic perspective," Mathematical Social Sciences, Elsevier, vol. 25(1), pages 65-86, December.
    5. Dixon, Huw David & Rankin, Neil, 1994. "Imperfect Competition and Macroeconomics: A Survey," Oxford Economic Papers, Oxford University Press, vol. 46(2), pages 171-199, April.
    6. Fender, John & Yip, Chong K., 1994. "Open economy macroeconomics under imperfect competition A two-country model," Journal of International Economics, Elsevier, vol. 37(1-2), pages 49-63, August.
    7. Nobuhiro Kiyotaki, 1988. "Multiple Expectational Equilibria Under Monopolistic Competition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(4), pages 695-713.
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