A Mathematical Analysis of a MMT Type Coordinated Fiscal and Monetary Stabilization Policy in a Dynamic Keynesian Model

Toichiro Asada, Rudolf Zimka, Michal Demetrian and Emília Zimková

Journal of Economic Behavior & Organization, 2023, vol. 215, issue C, 442-454

Abstract: We study the dynamic properties of the coordinated fiscal and monetary stabilization policy in a modern monetary theory (MMT) type macrodynamic model in detail using advanced mathematical techniques and numerical simulations. The dynamic stability, instability of equilibrium points, and questions of qualitative changes at bifurcation points are investigated both mathematically and numerically. Finally, the economic implications of the analysis of this MMT type dynamic model are discussed in contrast to the more orthodox type of Keynesian stabilization policy mix model.

Keywords: Coordinated fiscal and monetary stabilization policy; MMT; dynamic Keynesian model; stability; instability; bifurcation analysis (search for similar items in EconPapers)
JEL-codes: E12 E31 E32 E52 E62 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:215:y:2023:i:c:p:442-454

DOI: 10.1016/j.jebo.2023.09.024

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