The New Palgrave Dictionary of Economics

Living Edition
| Editors: Palgrave Macmillan

Dynamic Models with Non-clearing Markets

  • Jean-Pascal Bénassy
Living reference work entry


This article studies a new class of models which synthesize the two traditions of general equilibrium with non-clearing markets and imperfect competition on the one hand, and dynamic stochastic general equilibrium (DSGE) models on the other hand. This line of models has become a central paradigm of modern macroeconomics for at least three reasons: (a) it displays solid microeconomic foundations, (b) it is a highly synthetic theory, which combines in a unified framework general equilibrium, non-clearing markets, imperfect competition, growth theory and rational expectations, and (c) it is also an empirical success, leading to substantial progress towards matching real world statistics.


Budget constraints Dynamic models with non-clearing markets Dynamic stochastic general equilibrium (DSGE) models Efficiency wages Fixprice macroeconomic model General equilibrium Growth theory Implicit contracts IS–LM model Keynesianism Market clearing Menu costs Microfoundations Monetary shocks Monopolistic competition Nominal rigidities Non-clearing markets in general equilibrium Objective demand curve Phillips curve Quantity constraint Quantity signals Rational expectations Real business cycles State dependent price rigidities Sticky prices Technological shocks Time-dependent contracts Walrasian equilibrium 

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© The Author(s) 2008

Authors and Affiliations

  • Jean-Pascal Bénassy
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