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THE DYNAMICS OF KEYNESIAN MONETARY GROWTH

Published online by Cambridge University Press:  25 March 2003

Carl Chiarella
Affiliation:
Cambridge University Press, 2000
Peter Flaschel
Affiliation:
Cambridge University Press, 2000
Graeme Wells
Affiliation:
Australian National University

Extract

The objective of this book is to provide “a systematic theory of endogenous business fluctuations and growth with a hierarchical structure of integrated macro-dynamical models” (p. 372). The starting point is Tobin's neoclassical model of monetary growth, and successive chapters show how Tobin's model can be extended in various “realistic” directions while preserving the relevant adding-up and balance-sheet constraints of a macro model. The work reported here is squarely in an ongoing European theoretical tradition that eschews the stochastic, representative-agent, approach to macroeconomic modeling. Absent stochastic disturbances, the authors provide a qualitative analysis of dynamic behavior for a variety of closed-economy models—a variety that, as the authors themselves point out, is closely related to three prototype models studied in Part I of Sargent's 1977 book, Macroeconomic Theory.

Type
BOOK REVIEW
Copyright
© 2003 Cambridge University Press

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