We develop a dynamic model of monopolistic competition which sheds light on how the interplay between the degree of product differentiation and intertemporal elasticity of substitution affects the steady-state equilibrium. Consumers love variety and split their labor endowment between wage...

We incorporate a wage bargaining structure in a dynamic general equilibrium model and show how this feature changes short and long-run properties of equilibria compared with a perfectly competitive setting. We discuss how employment, capital, and income shares respond to wage setting shocks and...

We incorporate a wage bargaining structure in a dynamic general equilibrium model and show how this feature changes short and long-run properties of equilibria compared with a perfectly competitive setting. We discuss how employment, capital, and income shares respond to wage setting shocks and...