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Article Dans Une Revue Journal of Economic Dynamics and Control Année : 2015

Price dynamics, financial fragility and aggregate volatility

Résumé

Within a general equilibrium framework a la Long and Plosser (1983), we investigate the dynamics emerging from the interactions of households and firms that are adaptive price setters and financially constrained. Adaptive price-setting behavior induces micro founded out-of-equilibrium dynamics along which agents become heterogeneous in terms of prices and wealth. The stringency of the financial constraints determine the regime into which the model settles: either an equilibrium one or a disequilibrium one conductive to financial fragility and aggregate volatility. In this setting , we investigate how the structure of the production network a↵ects the emergence of aggregate volatility from micro-level price and financial shocks, hence providing a dynamical counterpart to recent results of Acemoglu and al (2012).
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Dates et versions

halshs-01152302 , version 1 (15-05-2015)

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Antoine Mandel, Simone Landini, Mauro Gallegati, Herbert Gintis. Price dynamics, financial fragility and aggregate volatility. Journal of Economic Dynamics and Control, 2015, 51, pp.257-277. ⟨10.1016/j.jedc.2014.11.001⟩. ⟨halshs-01152302⟩
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