MARC Record from Library of Congress

LEADER: 02205cam a22003017a 4500
001 2006619387
003 DLC
005 20060627103452.0
007 cr |||||||||||
008 060626s2006 mou sb f000 0 eng
010 $a 2006619387
040 $aDLC$cDLC$dDLC
050 00 $aHB1
100 1 $aWang, Pengfei.
245 10 $aImperfect competition and sunspots$h[electronic resource] /$cby Pengfei Wang and Yi Wen.
260 $a[St. Louis, Mo.] :$bFederal Reserve Bank of St. Louis,$c[2006]
490 1 $aWorking paper ;$v2006-015A
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file as viewed on 6/26/2006.
530 $aAlso available in print.
504 $aIncludes bibliographical references.
520 3 $a"This paper shows that imperfect competition can be a rich source of sunspots equilibria and coordination failures. This is demonstrated in a dynamic general equilibrium model that has no major distortions except imperfect competition. In the absence of fundamental shocks, the model has a unique certainty (fundamental) equilibrium. But there is also a continuum of stochastic (sunspots) equilibria that are not mere randomizations over fundamental equilibria. Markup is always counter-cyclical in sunspots equilibria, which is consistent with empirical evidence. The paper provides a justification for exogenous variations over time in desired markups, which play an important role as a source of cost-push shocks in the monetary policy literature. We show that fluctuations driven by self-fulfilling expectations (or sunspots) look very similar to fluctuations driven by technology shocks, and we prove that such fluctuations are welfare reducing"--Federal Reserve Bank of St. Louis web site.
653 $aSunspots;$aself-fulling expectations;$aimperfect Competition;$aimperfect Information;$aindeterminacy;$areal business cycles;$amarginal costs;$acounter-cyclical markup
700 1 $aWen, Yi.
710 2 $aFederal Reserve Bank of St. Louis.
830 0 $aWorking paper (Federal Reserve Bank of St. Louis : Online) ;$v2006-015A.
856 40 $uhttp://research.stlouisfed.org/wp/more/2006-015/