Abstract
The main characteristic of a basic NK model is the introduction of price stickiness in the production sector. In order to achieve this, NK models include two market imperfections: First, price rigidities require firms not to be price takers, hence some type of market power has to be introduced. Usually, this leads to the design of monopolistic competition models.
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© 2018 Springer Fachmedien Wiesbaden GmbH, part of Springer Nature
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Dörr, P. (2018). General Equilibrium Models. In: The Impact of Monetary Policy on Economic Inequality. BestMasters. Springer Gabler, Wiesbaden. https://doi.org/10.1007/978-3-658-24835-2_3
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DOI: https://doi.org/10.1007/978-3-658-24835-2_3
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Online ISBN: 978-3-658-24835-2
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