A Dynamic Non-Tatonnement Macroeconomic Model with Stochastic Rationing

In this paper we present a dynamic macroeconomic model with stochastic quantity rationing. Trades take place in each period even when prices are not at their Walrasian level. Moving from one period to the next, prices and wages are adjusted according to the intensity of rationing, a reliable measure of which is obtained by means of stochastic rationing. A complete characterization of the typology of equilibria is given and dynamic adjustment equations are derived. From this it is evident that structural parameters such as the adjustment speed of prices, as well as government policy parameters, are decisive for the type of dynamics that emerges. In particular there is a tendency for nominal wage stickiness to stabilise the economy whereas high wage ‡exibility favours cyclical and irregular behaviour.