A Possibility of Protracted Output Gaps in an Economy without Any Rigidity

The paper examines a new possibility of output gaps in an economy without any rigidity. The driving force behind the new possibility is non-cooperative behavior of consumers. The paper shows that there is a possibility that when a fundamental shock hits an economy this non- cooperative nature makes consumers deviate form the optimal path of the representative consumer, and thus agents do not jump consumption and proceed on the deviated transition path.

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Year of publication:	2004-04-24
Authors:	Harashima, Taiji
Institutions:	EconWPA
Subject:	Output gaps \| Disequilibrium \| Intertemporal consumer choice \| Business fluctuations

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Extent:	application/pdf
Series:	Microeconomics.
Type of publication:	Book / Working Paper
Notes:	Type of Document - pdf; pages: 48 48 pages
Classification:	D50 - General Equilibrium and Disequilibrium. General ; D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving ; E32 - Business Fluctuations; Cycles
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005135128