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| Author: | Dixon, H. Rankin, N. |
| Title: | Imperfect competition and macroeconomics: a survey. |
| Journal: | Oxford Economic Papers
1994 : APR, VOL. 46:2, p. 171-199 |
| Index terms: | IMPERFECT COMPETITION MACROECONOMICS FISCAL POLICY MONETARY POLICY |
| Language: | eng |
| Abstract: | This survey outlines the general lessons of recent literature on imperfectly competitive macroeconomics for the theory of monetary and fiscal policy. A general framework is presented which nests most of the existing literature. Although money is of itself neutral, the presence of menu costs, non-unit-elastic expectations, or sectoral nominal rigidities results in an output- and welfare-increasing role for monetary policy. Imperfect competition alone is enough for fiscal policy to affect output, but without monetary non-neutrality the effect is as likely to be negative as positive. |
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