Article (Scientific journals)
Microeconomic Uncertainty and Macroeconomic Indeterminacy
Fagnart, Jean-François; Pierrard, Olivier; Sneessens, Henri
2007In European Economic Review, 51 (6), p. 1564-1588
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Keywords :
Indeterminacy; Non-Walrasian economy; Business cycle; Animal spirits; Continuum of equilibria
Abstract :
[en] We construct a stylised intertemporal macroeconomic model to illustrate how the combination of decentralised trading and microeconomic uncertainty can generate coordination problems and indeterminacy of the macroeconomic equilibrium. With a competitive labour market and a fixed labour supply, the range of equilibria depends mainly on the variance of the idiosyncratic shocks and may thus remain fairly narrow. The situation is different when there is imperfect competition on the labour market. The existence of real rigidities is apt to considerably increase the size of the interval of indeterminacy, for a given variance of the shocks.
Disciplines :
Macroeconomics & monetary economics
Identifiers :
UNILU:UL-ARTICLE-2013-104
Author, co-author :
Fagnart, Jean-François;  Université de Cergy-Pontoise, THEMA
Pierrard, Olivier;  BCL - Banque centrale du Luxembourg
Sneessens, Henri ;  Université Catholique de Louvain - UCL > IRES - Institut de recherches économiques et sociales
Language :
English
Title :
Microeconomic Uncertainty and Macroeconomic Indeterminacy
Publication date :
2007
Journal title :
European Economic Review
ISSN :
0014-2921
Publisher :
Elsevier Science, Amsterdam, Netherlands
Volume :
51
Issue :
6
Pages :
1564-1588
Peer reviewed :
Peer reviewed
Available on ORBilu :
since 28 August 2013

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