From Keynes to Solow to optimal growth: An encompassing model of monetary and fiscal policy

Richard H. Day and Chengyu Yang

Journal of Economic Behavior & Organization, 2009, vol. 72, issue 2, 780-795

Abstract: A dynamic, out-of-equilibrium model of aggregate demand and supply is specified. The existence of, and convergence to, a macroeconomic equilibrium is derived, and the existence of a supporting revealed social utility function is established. Empirical estimates for three recent historical 'eras' suggest the model's explanatory power is impressive. Implications for possible policy repercussions include striking shifts in effect.

Keywords: Growth; Out-of-equilibrium; Monetary; and; fiscal; policy; Revealed; social; preference (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:72:y:2009:i:2:p:780-795

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