Inflation: The Invisible Foot of Macroeconomics.
The authors take a simple, well-known macroeconomic model and treat it as a gam e between two players-the government and an all-embracing union. The payoffs have the form of a prisoner's dilemma. The equilibrium outcom e produces unwanted inflation and is not Pareto optimal. This is desp ite the fact that all participants are assumed to have full informati on. This result is shown to be quite robust to the form of the model and is not affected if one of the players is forced to announce its s trategy in advance. This the authors call the invisible foot of macro economics. Copyright 1987 by The Economic Society of Australia.
Year of publication: |
1987
|
---|---|
Authors: | Carter, Michael ; Maddock, Rodney |
Published in: |
The Economic Record. - Economic Society of Australia - ESA, ISSN 1475-4932. - Vol. 63.1987, 181, p. 120-28
|
Publisher: |
Economic Society of Australia - ESA |
Saved in:
Saved in favorites
Similar items by person
-
Inflation as a Prisoner's Dilemma: A Comment
Maddock, Rodney, (1982)
-
A Child's Guide to Rational Expectations.
Maddock, Rodney, (1982)
-
Rational expectations : macroeconomics for the 1980s?
Carter, Michael, (1984)
- More ...