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The EMSs Approach to Macroeconomics Sometimes the road less traveled is less traveled for a reason ?
| Content Provider | Semantic Scholar |
|---|---|
| Author | Seinfeld, Jerry |
| Abstract | In this chapter we start our review of an approach to macroeconomics that is in part alternative and in part complementary to the neoclassical one. We depart from the perfectly competitive environment, in the sense that rms do not take prices as given, but they do choose their strategies and they interact strategically. We focus not only on the choice of prices as the strategic variables, but also on the choice of output levels, and on the choice of entry to produce new or better goods. In most of the analysis of this book we adopt either symmetric Cournot competition or symmetric Bertrand competition as the main models of static strategic interactions, but we will occasionally introduce other forms of competition, as Stackelberg competition or models of imperfect collusion, and we propose a general approach that can be employed with more sophisticated competitive structures borrowed from research in the eld of industrial organization. As a matter of fact, one of the main aims of this book is exactly to build a solid bridge between macroeconomics and industrial organization. The new ingredients of the endogenous market structures (EMSs) approach will be on the supply side of the economy. The technological conditions will be characterized by positive xed costs of entry so as to move beyond the constant returns to scale hypothesis. To a large extent, we will also depart from the neoclassical assumption that investment (of nal goods) builds the physical capital that is used as factor of production together with labor supplied by the working class. That was a good assumption to describe production in the industrialization phase, characterized by the dominance of the secondary (manufacturing) sector and by the social conict between capital and labor, but not such a good one to describe production in the modern age, dominated by the tertiary (service) sector and by the New Economy, where ideas, innovations, intellectual property rights and creativity are the main inputs needed to create new products, and where the value of start ups without any capital can be high because of these intangible inputs. For this reason, we will embrace a concept of investment (in terms of labor or consumption |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://page-one.springer.com/pdf/preview/10.1007/978-3-540-87427-0_2 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
