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We construct a dynamic general equilibrium model in which the typical industry colludes by threatening to punish deviations from an implicitly agreed upon pricing path. We argue that models of this type explain better than do competitive models the way in which the economy responds to aggregate...
Persistent link: https://www.econbiz.de/10012475831
We construct a dynamic general equilibrium model in which the typical industry colludes by threatening to punish deviations from an implicitly agreed upon pricing path. We argue that models of this type explain better than do competitive models the way in which the economy responds to aggregate...
Persistent link: https://www.econbiz.de/10013234945
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theory, markups are chosen to ensure that no one deviates from an (implicitly) collusive understanding. Increases in rates of …
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. The imperfect information is endogenized using a variant of the theory of quot;rational inattentionquot; proposed by Sims …
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