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Walras-Keynes equilibria coordination and macroeconomics

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  • DREZE, Jacques H.

    () (Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium)

Abstract

In decentralised market economies, supply-constrained equilibria may persist as coordination failures, sustained but not caused by price rigidities. This feature may be arbitrarily severe, even at prices com- patible with competitive equilibrium. The supply-constraints may originate in rational expectations. Some implications for macroeco- nomics are drawn. The possibility of coordination failures explains why organised labour may resist wage flexibility. These features are il- lustrated in elementary macroeconomic prototypes, like RBC or Barro- Grossman-Malinvaud prototypes.

Suggested Citation

  • DREZE, Jacques H., 1997. "Walras-Keynes equilibria coordination and macroeconomics," CORE Discussion Papers 1997051, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:1997051
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Jacques H. Drèze & P. Jean-Jacques Herings, 2008. "Kinky perceived demand curves and Keynes-Negishi equilibria," International Journal of Economic Theory, The International Society for Economic Theory, vol. 4(2), pages 207-246.
    2. DREZE, Jacques, 1999. "On the macroeconomics of uncertainty and incomplete markets," CORE Discussion Papers 1999064, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. repec:spo:wpecon:info:hdl:2441/6762 is not listed on IDEAS
    4. Alessandro Citanna & Herve Cres & Antonio Villanacci, "undated". "Underemployment of resources and self-fulfilling beliefs: Nonwalrasian allocations at walrasian prices," GSIA Working Papers 11, Carnegie Mellon University, Tepper School of Business.
    5. Olivier SCAILLET, 2001. "Density Estimation Using Inverse and Reciprocal Inverse Guassian Kernels," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    6. Fagnart, Jean-Francois & Pierrard, O. & Sneessens, Henri R., 2007. "Microeconomic uncertainty and macroeconomic indeterminacy," European Economic Review, Elsevier, vol. 51(6), pages 1564-1588, August.
    7. Francesco Saraceno, 2003. "Wage Regimes, Accumulation and Finance Constraints: Keynesian Unemployment Revisited," Macroeconomics 0311007, EconWPA.
    8. Mario Amendola & Jean-Luc Gaffard & Francesco Saraceno, 2004. "Wage Flexibility and Unemployment: The Keynesian Perspective Revisited," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(5), pages 654-674, November.
    9. DREZE, Jacques H. & DURRE, Alain & SNEESSENS, Henri R., 2000. "Investment stimulation, with some reference to housing," CORE Discussion Papers RP 1483, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    10. Shadman-Mehta, Fatemeh & Sneessens, Henri R., 1998. "Demand-Supply Interactions and Unemployment Dynamics: Can there be Path Dependency ? The Case of Belgium, 1955-1994," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1998017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    11. repec:spo:wpecon:info:hdl:2441/10287 is not listed on IDEAS
    12. Sneessens, Henri R., 1998. "Technological Bias and Unemployment: A Macroeconomic Perspective," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1999024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 00 Aug 1999.
    13. Cockx, Bart, 1999. "The Design of Active Labour Market Policies. What Matters and What Doesn't ?," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1999035, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

    More about this item

    Keywords

    coordination failures; supply constraints; price rigidities; macroeconomics.;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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