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Kinky perceived demand curves and Keynes-Negishi equilibria

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Listed author(s):
  • Jacques H., DREZE
  • Jean-Jacques, HERINGS

Abstract

The label “Keynes-Negishi equiibria” is attached here to equilibria in a monetary economy with imperfectly competitive product and labor markets where business firms and labor unions hold demand perceptions with kinks - as posited in Negishi’s 1979 book Microeconomic Foundations of Keynesian Macroeconomics. Such equilibria are defined in a general equilibrium model, and shown to exist. Methodological implications are briefly discussed in a concluding section.

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Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2007037.

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Length: 50
Date of creation: 01 Dec 2007
Handle: RePEc:ctl:louvec:2007037
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Keywords: Equilibrium; imperfect competition; perceived demands; kinky demand; princing rules; union wage model; union objectives; cash-in-advance;

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Find related papers by JEL classification:
  • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
  • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
  • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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  1. Dreze, Jacques H., 1979. "Demand estimation, risk-aversion and sticky prices," Economics Letters, Elsevier, vol. 4(1), pages 1-6.
  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. P. Herings & Herakles Polemarchakis, 2005. "Pareto improving price regulation when the asset market is incomplete," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(1), pages 135-154, 01.
  4. Stiglitz, Joseph E, 1984. "Price Rigidities and Market Structure," American Economic Review, American Economic Association, vol. 74(2), pages 350-355, May.
  5. Calmfors, Lars, 1982. " Employment Policies, Wage Formation and Trade Union Behavior in a Small Open Economy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 84(2), pages 345-373.
  6. Dreze, Jacques H. & Gollier, Christian, 1993. "Risk sharing on the labour market and second-best wage rigidities," European Economic Review, Elsevier, vol. 37(8), pages 1457-1482, December.
  7. DRÈZE, Jacques H., "undated". "On the macroeconomics of uncertainty and incomplete markets," CORE Discussion Papers RP 1510, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  8. Dehez, Pierre & Dreze, Jacques H. & Suzuki, Takashi, 2003. "Imperfect competition a la Negishi, also with fixed costs," Journal of Mathematical Economics, Elsevier, vol. 39(3-4), pages 219-237, June.
  9. Dehez, Pierre & Dreze, Jacques, 1988. "Competitive equilibria with quantity-taking producers and increasing returns to scale," Journal of Mathematical Economics, Elsevier, vol. 17(2-3), pages 209-230, April.
  10. Oliver Hart, 1982. "A Model of Imperfect Competition with Keynesian Features," The Quarterly Journal of Economics, Oxford University Press, vol. 97(1), pages 109-138.
  11. Oswald, Andrew J, 1979. "Wage Determination in an Economy with Many Trade Unions," Oxford Economic Papers, Oxford University Press, vol. 31(3), pages 369-385, November.
  12. Citanna, Alessandro & Cres, Herve & Dreze, Jacques & Herings, P. Jean-Jacques & Villanacci, Antonio, 2001. "Continua of underemployment equilibria reflecting coordination failures, also at Walrasian prices," Journal of Mathematical Economics, Elsevier, vol. 36(3), pages 169-200, December.
  13. Dreze, Jacques H., 1997. "Walras--Keynes equilibria coordination and macroeconomics," European Economic Review, Elsevier, vol. 41(9), pages 1735-1762, December.
  14. Arnsperger, Christian & de la Croix, David, 1993. "Bargaining and equilibrium unemployment : Narrowing the gap between New Keynesian and 'disequilibrium' theories," European Journal of Political Economy, Elsevier, vol. 9(2), pages 163-190, May.
  15. Dierker, Egbert & Guesnerie, Roger & Neuefeind, Wilhelm, 1985. "General Equilibrium When Some Firms Follow Special Pricing Rules," Econometrica, Econometric Society, vol. 53(6), pages 1369-1393, November.
  16. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-193.
  17. Douglas H. Blair & David L. Crawford, 1984. "Labor Union Objectives and Collective Bargaining," The Quarterly Journal of Economics, Oxford University Press, vol. 99(3), pages 547-566.
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Cited by:

  1. Hiroshi Yoshikawa, 2011. "Stochastic Macro-equilibrium and A Microfoundation for the Keynesian Economics," CIRJE F-Series CIRJE-F-827, CIRJE, Faculty of Economics, University of Tokyo.

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