Imperfect Competition and Macroeconomics: A Survey
Author(s)
Dixon, Huw; Rankin, Neil
Abstract
A study of recent literature reveals that imperfect competition results in the addition of several new ways by which policy affects output. Under conditions of money neutrality, the positive effect of fiscal expansion on output is not preferred to a negative effect. Any resultant output increase may increase welfare, unlike in economics where it is competitive. The nature of macroeconomic equilibrium, output and employment, and effects of policy on the welfare of agents, are discussed.
