The Balance Curve: A Foundation of Macro-Dynamics

Masahiro Konno
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Masahiro Konno: Private Researcher

Macroeconomics from EconWPA

Abstract: A simple framework is constructed and extended to consider the theory of investment. It shows that there exists in industrialized economies a certain structure that determines the balance curve, which relates the rates of inflation and capital accumulation if demand and productive capacity are to be balanced as a whole at the initial stage of the next period. The balance curve, together with the modified short-period Phillips curve, governs the behavior of industrialized economies. In other words, they make it possible to recognize coherently the mechanism of chief economic phenomena such as growth, business cycles, creeping inflation and stagflation, and accordingly to prescribe for "diseases."

Keywords: Balance Curve; Capital Accumulation; Inflation; Modified Short-Period Phillips Curve (search for similar items in EconPapers)
JEL-codes: E10 (search for similar items in EconPapers)
Date: 2002-02-21
Note: Type of Document - Word; prepared on SOTEC PC - PC-Windows 98; to print on Canon Laser Shot; pages: 27 ; figures: included. 27pages, Word for Windows document via ftp
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