Policy-Induced Shift Away from Nash Equilibrium
When a government policy leads to unintended consequences, such as a widespread wage increase, it can push the economy out of its initial Nash equilibrium. This shift signifies that the previous stable outcome is disrupted, creating a state of disequilibrium.
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Introduction to Macroeconomics Course
Ch.2 Unemployment, wages, and inequality: Supply-side policies and institutions - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
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Learn After
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