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Monopolistic competition, aggregate demand externalities and real effects of nominal money by Olivier Blanchard

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Published by Massachusetts Institute of Technology, Dept. of Economics in Cambridge, Mass .
Written in English

Subjects:

  • Mathematical models,
  • Competition,
  • Monopolies

Book details:

Edition Notes

StatementOlivier J. Blanchard, Nobuhiro Kiyotaki
SeriesWorking paper / Department of Economics -- no. 401, Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 401.
ContributionsKiyotaki, Nobuhiro
The Physical Object
Pagination28 p., [4] :
Number of Pages28
ID Numbers
Open LibraryOL24976317M
OCLC/WorldCa15320282

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Monopolistic Competition, Aggregate Demand Externalities and Real Effects of Nominal Money Article though the frictions that cause fluctuations in aggregate demand to have real effects are. DEC workingpaper department ofeconomics MONOPOLISTICCOMPETITION,AGGREGATEDEMAND EXTERNALITIESANDREALEFFECTSOFNOMINALMONEY ard NobuhiroKiyotaki. Blanchard, Olivier J. & Kiyotaki, Nobuhiro, "Monopolistic Competition, Aggregate Demand Externalities and Real Effects Of Nominal Money," SSRI Workshop Series , University of Wisconsin-Madison, Social Systems Research Institute.   A long standing issue in macroeconomics is that of the relation of imperfect competition to fluctuations in output. In this paper we examine the relation between monopolistic competition and the role of aggregate demand in the determination of output. We first show that monopolistically competitive economies exhibit an aggregate demand by:

Monopolistic competition, aggregate demand externalities and real effects of nominal money Item PreviewPages: Section II characterizes the inefficiency associated with monopolistic competition and shows the inefficiency to be due to an aggregate demand externality. Section III studies the effects of changes in nominal money, when money is the numeraire, and when there are small, second order, costs of changing prices. Olivier J. Blanchard & Nobuhiro Kiyotaki, "Monopolistic Competition, Aggregate Externalities and real Effects of Nominal Money," Working papers , Massachusetts Institute of Technology (MIT), Department of Economics. Handle: RePEc:mit:worpap The new Keynesians (Taylor, ;Calvo, ;Rotemberg, ; Blanchard and Kiyotaki, ; Dixit and Stiglitz, ) rekindled the Keynesian belief in policy effectiveness due to the prevalence of nominal and real rigidities that occur in markets as a result of imperfect competition in the .

Get this from a library! Monopolistic Competition, Aggregate Demand Externalities and Real Effects of Nominal Money. [Nobuhiro Kiyotaki; Olivier J Blanchard; National Bureau of Economic Research.;] -- A long standing issue in macroeconomics is that of the relation of imperfect competition to fluctuations in output. In this paper we examine the relation between monopolistic competition and the. Monopolistic Competition, Aggregate Demand Externalities and Real Effects of Nominal Money. In this paper we examine the relation between monopolistic competition and the role of aggregate demand in the determination of output. We first show that monopolistically competitive economies exhibit an aggregate demand : Olivier J. Blanchard and Nobuhiro Kiyotaki. competition creates aggregate demand externalities on the macro level. When introducing sticky prices, we can look at the effects of nominal money and shocks, to understand the effects on output and welfare. If firms have monopoly power, they may want to accommodate shifts in demand as long as price exceeds marginal cost. model, with monopolistic competition in both labor and goods markets, and with nominal money it then characterizes the equilibrium. Section II characterizes the inefficiency associated with monopolistic competition and shows the inefficiency to be due to an aggregate demand externality. Bection III studies the effect, of change!Cited by: