Dynamic model of imperfect competition in multi-sector economy

This paper presents macroeconomic model of dynamics on the realistic input–output network. The distinguishing feature of the model is in taking into account imperfect competition in two markets: that of commodities and the labour one. The introduction of mechanism of imperfect competition allows to analyze the impact of both real and nominal shocks. It is shown that the response to real shocks is approximately the same as in perfectly competitive models previously described in the literature and determined with the PageRank centrality of the graph. The impact of the monetary shocks does not depend on PageRank, but these shocks can cause significant fluctuations of real aggregate indexes in the short run and can provide a possible explanation of sectoral evolution coherence.