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| Author: | Herings, P. J.-J. |
| Title: | Endogenously determined price rigidities |
| Journal: | Economic Theory
1997 : VOL. 9:3, p. 471-498 |
| Index terms: | PRICE CONTROL PRICE LEVEL EQUILIBRIUM ANALYSIS ECONOMIC SYSTEMS POLITICAL ECONOMY |
| Language: | eng |
| Abstract: | There exists an extensive literature about economies with price rigidities, where some constraints on the set of admissible price systems are exogenously given. In this paper a general equilibrium model extended by a political system is described where the price rigidities are endogenously chosen by political candidates. Sufficient conditions for the existence of a mixed strategy and pure strategy equilibrium are given. Finally an example is discussed, where in equilibrium both political candidates propose price rigidities excluding the Walrasian equilibrium price system. |
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