Document Type
Discussion Paper
Publication Date
4-1-1985
CFDP Number
745R
CFDP Revision Date
1985-07-01
CFDP Pages
37
Abstract
This paper focuses on the importance of strategic complementarity in agents’ payoff functions as a basis for macroeconomic coordination failures. We first analyze an abstract game and find that inefficient equilibria and a multiplier process may arise in the presence of strategic complementarities (essentially positively sloped reaction curves). We then place additional economic content on complementarities arising from production functions, matching technologies and commodity demand functions in a multi-sector economy.
Recommended Citation
Cooper, Russell and John, Andrew, "Coordinating Coordination Failures in Keynesian Models" (1985). Cowles Foundation Discussion Papers. 987.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/987