Inflation and speculation in a dynamic macroeconomic model

Inflation et spéculation dans un modèle macroéconomique dynamique

Matheus Grasselli () and Adrien Nguyen Huu ()
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Matheus Grasselli: Departement of Mathematics and Statistics [Hamilton, McMaster University] - McMaster University [Hamilton, Ontario], Fields Institute for Research In Mathematical Sciences - Fields Institute for Research In Mathematical Sciences
Adrien Nguyen Huu: CERMICS - Centre d'Enseignement et de Recherche en Mathématiques et Calcul Scientifique - ENPC - École nationale des ponts et chaussées
Authors registered in the RePEc Author Service: Adrien Nguyen-Huu

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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. We also emphasize some new qualitative behavior of the extended model, in particular its ability to produce and describe repeated financial crises as a natural pace of the economy, and its suitability to describe the relationship between economic growth and financial activities.

Keywords: Minsky's financial instability hypothesis; Keen model; stock-flow consistency; financial crisis; dynamical systems in macroeconomics; local stability; limit cycles (search for similar items in EconPapers)
Date: 2015-07-06
New Economics Papers: this item is included in nep-cba, nep-pr~, nep-mac and nep-mon
Note: View the original document on HAL open archive server: https://hal.science/hal-01097661v1
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Citations: View citations in EconPapers (16)

Published in Journal of Risk and Financial Management, 2015, Selected Papers from the Fifth International Conference on Mathematics in Finance (MiF) 2014, Organized by North-West University, University of Cape Town and University of Johannesburg, South Africa) 8 (3), http://www.mdpi.com/1911-8074/8/3/285

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Related works:
Journal Article: Inflation and Speculation in a Dynamic Macroeconomic Model (2015)
Working Paper: Inflation and speculation in a dynamic macroeconomic model (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01097661

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