A dynamic non-tatonnement macroeconomic model with stochastic rationing

We present a dynamic macroeconomic model in which trades take place in each period even when prices are not at their Walrasian level. Prices and wages are adjusted between periods according to the intensity of rationing, a reliable measure of which is obtained through stochastic rationing. Dynamic adjustment equations are derived and implemented in a simulation program. The simulations show that structural parameters like the adjustment speed of prices and government policy parameters are decisive for the type of dynamics that emerges. In particular nominal wage stickiness stabilizes the economy whereas high wage flexibility favors cyclical and irregular behavior.