Monetarism, Rational Expectations, Oligopolistic Pricing, and the MPS Econometric Model

Bennett T. McCallum

26 citations0/0 files storedJournal of Political Economy

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Monetary Policy and Economic Impact Economic Theory and Policy Economic theories and models

Abstract

This paper investigates the conjecture that oligopolistic pricing behavior will invalidate the Lucas-Sargent policy-ineffectiveness proposition even if expectations are formed rationally. The procedure is to examine the properties of an analytical macroeconomic model that incorporates a simplified version of the MPS wage-price sector. It is shown that the validity of the conjecture depends upon the precise manner in which lags are built into the price adjustment equation. A crucial condition is isolated and used to motivate an empirical test. The results, based on quarterly U.S. data, are predominantly consistent with the ineffectiveness proposition.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 26 citations exist upstream.

References

1975"Rational" Expectations, the Optimal Monetary Instrument, and the Optimal Money Supply Rule 1977Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule 1976Rational expectations and the role of monetary policy 1976A Classical Macroeconometric Model for the United States 1977The Monetarist Controversy or, Should We Forsake Stabilization Policies?1976Exogeneity and Causal Ordering in Macroeconomic Models 1977Price-Level Stickiness and the Feasibility of Monetary Stabilization Policy with Rational Expectations 1975On the Global Identification of the Dynamic Simultaneous Equations Model with Stationary Disturbances

Cited by

1992The impact of academic competencies on wages, unemployment, and job performance 1997The Federal Reserve's Tight Monetary Policy During the 1973-75 Recession: A Survey of Possible Interpretations 1981Sluggish Price Adjustments and the Effectiveness of Monetary Policy Under Rational Expectations: Comment 1983Real and nominal factors in the cyclical behavior of interest rates, output, and money

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.