Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/70814
Authors: 
Kaas, Leo
Madden, Paul
Year of Publication: 
2000
Series/Report no.: 
Reihe Ökonomie / Economics Series, Institut für Höhere Studien (IHS) 83
Abstract: 
We consider a multi-sector overlapping generations model with imperfectly competitive firms in the output markets and wage setting trade unions in the labour markets. A coordination problem between firms creates multiple temporary equilibria which are either Walrasian or of the Keynesian unemployment type. There exist many deterministic and stochastic equilibrium cycles fluctuating between Keynesian recession and Walrasian boom periods with arbitrarily long phases in each regime. The cycles are in accordance with certain empirical regularities. Money is neutral and superneutral, but appropriate countercyclical fiscal policies stabilize the cycles in a textbook Keynesian way.
Subjects: 
endogenous business cycles
imperfect competition
stabilization policy
JEL: 
D43
E32
E62
Document Type: 
Working Paper

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