Inflation and Speculation in a Dynamic Macroeconomic ModelReport as inadecuate




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1

McMaster University, 1280 Main St. W, Hamilton, ON L8S 4L8, Canada

2

Université Paris-Est, CERMICS, Projet RISKERGY, 6-8 Av. Blaise Pascal, 77455Champs-sur-Marne, France





*

Author to whom correspondence should be addressed.



Academic Editors: Chia-Lin Chang and Coenraad Labuschagne

Abstract We study a monetary version of the Keen model by merging two alternative extensions, namely the addition of a dynamic price level and the introduction of speculation. We recall and study old and new equilibria, together with their local stability analysis. This includes a state of recession associated with a deflationary regime and characterized by falling employment but constant wage shares, with or without an accompanying debt crisis. View Full-Text

Keywords: Minsky’s financial instability hypothesis; debt-deflation; Keen model; stock-flow consistency; financial crisis; dynamical systems in macroeconomics; local stability Minsky’s financial instability hypothesis; debt-deflation; Keen model; stock-flow consistency; financial crisis; dynamical systems in macroeconomics; local stability





Author: Matheus R. Grasselli 1,* and Adrien Nguyen Huu 2

Source: http://mdpi.com/



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