This book focuses on the rapidly growing research field of imperfect competition, asymmetric information, and other market imperfections in a macroeconomic context. It brings together leading researchers from the USA and Europe to examine the implications for macroeconomic policy of market imperfections in output, labour and financial markets. All the contributions are original, and include several general surveys and expository chapters which synthesize the large literature, along with some state-of-the-art research at the frontier of the discipline. This is the first volume to focus exclusively on this literature. It should be a valuable resource for graduate students and researchers in macroeconomics.
• Latest research by leading authors from both sides of the Atlantic (including many young 'rising stars') • Over 1/3 of the book includes specially written 'handbook style' chapters that expound and synthesize recent research in specific areas • Will be invaluable reading for advanced students in macroeconomics
Introduction Huw Dixon and Neil Rankin; Part I. Overviews and Perspectives: 1. Classical and Keynesian features in macroeconomic models with imperfect competition Jean-Pascal Bénassy; 2. Imperfect competition and macroeconomics: a survey Huw Dixon and Neil Rankin; 3. Notes on imperfect competition and new Keynesian economics Richard Startz; Part II. Goods Market Imperfections: 4. Optimal labour contracts and imperfect competition: a framework for analysis Russell Cooper; 5. Market power, coordination failures and endogenous fluctuations Claude d'Aspremont, Rodolphe Dos Santos Ferreira, and Louis-André Gérard-Varet; 6. Macroeconomic externalities Andrew John; Part III. Labour Market Imperfections: 7. Demand uncertainty and unemployment in a monopoly union model Omar Licandro; 8. Efficiency wages as a persistence mechanism Gilles Saint-Paul; 9. Efficiency, enforceability and acyclical wages Christian Schultz; 10. Business fluctuations, worker moral hazard and optimal environment policy Jon Strand; Part IV. Financial Market Imperfections: 11. The stock market and equilibrium recessions Jeff Frank; 12. Asymmetric information, investment finance and real business cycles Brian Hillier and Tim Worrall; Part V. Nominal Rigidities and Bounded Rationality: 13. Hedging, multiple equilibria and nominal contracts Daron Acemoglu; 14. Information acquisition and nominal price adjustment Torben M. Andersen and Morten Hviid; 15. Expectation calculation, hyperinflation and currency collapse George W. Evans and Garey Ramey; 16. Menu costs and aggregate price dynamics Alan Sutherland; Bibliography.