TY  - JOUR
AU  - Rotemberg,Julio J.
AU  - Woodford,Michael
TI  - Dynamic General Equilibrium Models with Imperfectly Competitive Product Markets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4502
PY  - 1993
Y2  - October 1993
UR  - http://www.nber.org/papers/w4502
L1  - http://www.nber.org/papers/w4502.pdf
N1  - Author contact info:
Julio J. Rotemberg
Graduate School of Business
Harvard University, Morgan Hall
Soldiers Field
Boston, MA  02163
Tel: 617/495-1015
Fax: 617/496-5994
E-Mail: jrotemberg@hbs.edu

Michael Woodford
Department of Economics
Columbia University
420 W. 118th Street
New York, NY 10027
Tel: 212/854-1094
Fax: 212-854-8059
E-Mail: mw2230@columbia.edu
AB  - This paper discusses the consequences of introducing imperfectly competitive product markets into an otherwise standard neoclassical growth model.  We pay particular attention to the consequences of imperfect competition for the explanation of fluctuations in aggregate economic activity.  Market structures considered include monopolistic competition, the 'customer market' model of Phelps and Winter, and the implicit collusion model of Rotemberg and Saloner.  Empirical evidence relevant to the numerical calibration of imperfectly competitive models is reviewed.  The paper then analyzes the effects of imperfect competition upon the economy's response to several kinds of real shocks, including technology shocks, shocks to the level of government purchases, and shocks that change individual producers' degree of market power.  It also discusses the role of imperfect competition in allowing for fluctuations due solely to self-fulfilling expectations.
ER  -