In a Malinvaud disequilibrium model we show that along the boundary between Keynesian unemployment and repressed inflation is a continuum of non-Walrasian equilibria. Therefore, if wages are prices adjust according to (Clower-Benassy) effective excess demand function, the rest point will...

This paper analyses the implications of simultaneous output, price and wage adjustment at finite rates. Firms use a Marshallian-type output adjustment which uses available information about notional magnitudes. With this adjustment structure, the Walrasian equilibrium is globally stable. This...

A simple IS-LM model under imperfect competition and increasing returns is examined. It is shown that when firms maximize profits the values of the fiscal and monetary policy multipliers are smaller than their respective ones under perfect competition. If firms follow a cost-plus pricing rule,...