Abstract

http://ssrn.com/abstract=346983
 
 

Citations (20)



 


 



The Theory and the Facts of How Markets Clear: is Industrial Organization Valuable for Understanding Macroeconomics?


Dennis W. Carlton


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

February 1987

NBER Working Paper No. w2178

Abstract:     
This paper examines what industrial organization economists know and don't know about how markets clear. It reviews the empirical evidence which shows that, at least for some industries, price behavior is peculiar with prices failing to adjust over long periods of time. The paper discusses several existing theoretical explanations for the peculiar behavior such as fixed cost to changing price information asymmetries and theories of dynamic oligopoly. The paper goes on to develop some new theories to explain the observed behavior. The new explanations rely heavily on the importance of a seller's knowledge of his customers and on the optimality of non-price rationing. The paper discusses what relation, if anything, macroeconomics has to industrial organization.

Number of Pages in PDF File: 68

working papers series


Download This Paper

Date posted: August 8, 2007  

Suggested Citation

Carlton , Dennis W., The Theory and the Facts of How Markets Clear: is Industrial Organization Valuable for Understanding Macroeconomics? (February 1987). NBER Working Paper No. w2178. Available at SSRN: http://ssrn.com/abstract=346983

Contact Information

Dennis W. Carlton (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
312-322-0215 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN


Paper statistics
Abstract Views: 339
Downloads: 24
Citations:  20

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.297 seconds