Skip to main content Accessibility help
×
Hostname: page-component-7c8c6479df-5xszh Total loading time: 0 Render date: 2024-03-29T13:06:31.538Z Has data issue: false hasContentIssue false

6 - The emergence of complex dynamics in a “naturally” nonlinear integrated Keynesian model of monetary growth

Published online by Cambridge University Press:  05 December 2011

Carl Chiarella
Affiliation:
University of Technology Sydney
Peter Flaschel
Affiliation:
University of Bielefeld
William A. Barnett
Affiliation:
Washington University, Missouri
Carl Chiarella
Affiliation:
University of Technology, Sydney
Steve Keen
Affiliation:
University of Western Sydney Macarthur
Robert Marks
Affiliation:
Australian Graduate School of Management
Hermann Schnabl
Affiliation:
Universität Stuttgart
Get access

Summary

We present a fairly general Keynesian disequilibrium model of monetary growth that provides an integration of prototypical models of real growth, inflationary dynamics, and inventory adjustment into a consistent whole.

It makes use of a worker–capitalist example as in Kaldor's growth and distribution theory, an asset market structure as in Sargent's (1987, part I) Keynesian model of monetary growth, a description of the sector of firms that makes use of Malinvaud's (1980) investment theory and of the analysis of Franke and Lux (1993) and Franke (1992) of the Metzlerian process of inventory adjustment, a government sector as in Sargent (1987), a wage–price sector inspired by Rose's (1990) formulation of this sector, and an expectations mechanism with forward-and backward-looking components as in Groth (1988).

The behavior of firms takes into account the fact that firms seldom operate at their desired capacity and with their desired inventories, but deviate in general from these two norms because of unexpected changes in aggregate goods demand.

Our model is complete in the sense that the range of sectors utilized in conventional macrodynamic modeling is integrated here explicitly into a consistent whole, in particular with regard to financing conditions and budget restrictions of households, firms, and the government. There is no model in the traditional Keynesian literature of this generality, although all of its component parts can be considered as known from various sources.

Moreover, Keynesian monetary growth theory is generally not even mentioned in surveys on the literature on monetary growth, as for example in the recent article “Money, inflation and growth” by Orphanides and Solow (1990) in the Handbook of Monetary Economics.

Type
Chapter
Information
Commerce, Complexity, and Evolution
Topics in Economics, Finance, Marketing, and Management: Proceedings of the Twelfth International Symposium in Economic Theory and Econometrics
, pp. 111 - 146
Publisher: Cambridge University Press
Print publication year: 2000

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×