Macroeconomic policies in a supergame oligopolistic economy

This paper examines the impact of macroeconomic policies in a general equilibrium system where the product market is modelled as an oligopolistic supergame. It is shown that policies which affect the interest rate, influence the degree of competition and hence the level of output in the economy. The analysis reveals that some macroeconomic policies may have perverse and counter intuitive effects in the system.