The Dynamics of Keynesian Monetary Growth: Macro Foundations

by Carl Chiarella , Peter Flaschel

• ISBN13: 9780521643511
• ISBN10: 0521643511
• Format: Hardcover
• Copyright: 2000-08-07
• Publisher: Cambridge University Press

Summary

This book is in the tradition of non-market-clearing approaches to macrodynamic approaches. It builds a series of integrated disequilibrium growth models of increasing complexity, which display the economic interaction between households, firms and government across labour, goods, money, bonds and equities markets. Chiarella and Flaschel demonstrate how macrodynamics can be developed in a hierarchical way from economically simple structures to more advanced ones. In addition it investigates complex macrodynamic feedback mechanisms. The book is organised into seven chapters. Chapter 1 discusses traditional macrodynamic model buidling. Chapters 2-4 show how Keynesian disequilibrium growth can be obtained from Tobin and Keynes-Wicksell monetary growth models. Chapter 5 treats the cases of substitution in production, and Chapter 6 provides the working model of the book. Chapter 7 discusses further extensions and gives an outlook on future work.

Table of Contents

List of figures	x
Foreword	xv
Richard H. Day
Preface	xviii
Acknowledgments	xx
Notation	xxii
General introduction	1	(9)
Traditional monetary growth dynamics	10	(59)
Introduction	10	(2)
Macro foundations of macroeconomics	12	(12)
Basic Tobin models of monetary growth	24	(7)
Basic Keynes-Wicksell models of monetary growth	31	(8)
Basic AS--AD growth models	39	(7)
The modeling of expectations	46	(15)
A new integrated approach to Keynesian monetary growth	61	(4)
Mathematical tools	65	(4)
Appendix	67	(2)
Tobinian monetary growth: the (neo)Classical point of departure	69	(58)
The basic equilibrium version of Tobin's model of monetary growth: superneutrality and stability?	71	(11)
The money-market disequilibrium extension: further stability analysis	82	(10)
Labor-market disequilibrium and cyclical monetary growth	92	(10)
General equilibrium with a bond market: concepts of disposable income and Ricardian equivalence	102	(10)
A general disequilibrium version of the neoclassical model of monetary growth	112	(11)
Outlook: independent investment behavior and Wicksellian price dynamics	123	(4)
Keynes--Wicksell models of monetary growth: synthesizing Keynes into the Classics	127	(46)
The general prototype model	129	(7)
The intensive form of the model	136	(4)
The Goodwin growth cycle case	140	(6)
The Rose employment cycle extension	146	(8)
Monetary growth cycles: the basic case	154	(5)
Expectations and the pure monetary cycle	159	(9)
The real and the monetary cycle in interaction	168	(3)
Outlook: less than full capacity growth	171	(2)
Keynesian monetary growth: the missing prototype	173	(69)
A general Keynesian model of monetary growth	175	(9)
Comparative statics: the IS-LM subsector	184	(6)
Growth cycle implications	190	(9)
Employment cycle extensions	199	(8)
Keynesian monetary growth: the basic case	207	(7)
Monetary and real factors in Keynesian cyclical growth dynamics	214	(6)
Outlook: adding smooth factor substitution	220	(22)
Appendix 1: The Benassy business cycle model	231	(4)
Appendix 2: Technical change, wage taxation, average inflation and p-star expectations	235	(7)
Smooth factor substitution: a secondary and confused issue	242	(36)
The Tobin case: one further integrated law of motion	243	(10)
The Keynes--Wicksell case: increased stability through increased flexibility	253	(6)
The Keynesian case with smooth factor substitution	259	(16)
Outlook: sluggish price as well as quantity dynamics	275	(3)
Keynesian monetary growth: the working model	278	(62)
Introduction	278	(5)
The Kaldor--Tobin model of monetary growth	283	(10)
An integrated Keynes--Metzler model of monetary growth	293	(21)
A (5 + 1)-D modification of the six-dimensional Keynes-Metzler model	314	(21)
Outlook: macroeconometric model building	335	(5)
The road ahead	340	(43)
Endogenous long-run growth and employment	341	(7)
The dynamic structure of the model	348	(2)
Analysis of the employment subdynamics	350	(4)
Analysis of the growth subdynamics	354	(2)
Analysis of the complete dynamical system	356	(2)
Some numerical simulations	358	(14)
Summary and directions for future research	372	(11)
References	383	(11)
Author index	394	(3)
Subject index	397