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| Author: | Andersen, T. M. |
| Title: | Effective demand, differential information and the multiplier. |
| Journal: | Economic Journal
1987 : JUN, VOL. 97:386, p. 353-371 |
| Index terms: | MULTIPLIER THEORY DEMAND ECONOMETRIC MODELS |
| Language: | eng |
| Abstract: | A simple example illustrates how problem of co-ordinating production and consumption plans can generate business cycles. The methodology of the model applied is closely related to that of the new classical macroeconomics. However a number of empirical implications differ from this kind of macroeconomics. The model is set up first, then aggregate demand shocks are analyzed under three different information structures, namely full information, homogeneous information and heterogenous information. The model yields interesting results on the price/wage as well as quantity adjustment, the multiplier effects and the labor market. A few technical details are given in an appendix. |
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