Kinky perceived demand curves and Keynes–Negishi equilibria |
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| Authors: | Jacques H Drèze P Jean-Jacques Herings |
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| Institution: | Center of Operation Research and Econometrics UniversitéCatholique de Louvain, Louvain-la-Neuve, Belgium. Email:;Department of Economics, Maastricht University, Maastricht, the Netherlands. |
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| Abstract: | The label "Keynes–Negishi equilibria" 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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| Keywords: | equilibrium imperfect competition perceived demands kinky demand pricing rules union wage model union objectives cash-in-advance |
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