Dynamics at an Intermediate-Macroeconomics Level: A Keynesian Macroeconomic Model with Inventory and Production-Consumption Delays

Aleksandar Vasilev

EconStor Open Access Articles and Book Chapters, 2026, vol. 17, issue 2, 589-593

Abstract: We present a dynamic Keynesian model at an intermediate macroeconomic level, a la Metzler (1941) and Leslie (1993), where the utilized propagation mechanism is firms' inventory management, and producers following adaptive expectations in order to meet stochastic demand. In addition, there is a delay between production, and subsequent delivery and consumption from the shelves. The discrete-time model generates a second-order linear difference equation, which exhibits endogenous cycles, with fluctuations (oscillations), which - for a plausible range of model parameters – are stable, and die out over time. Pedagogically, this is the simplest model that is able to generate interesting non-linear dynamics, and thus of interest to both undergraduate economics students, and instructors teaching intermediate macroeconomics.

Keywords: dynamics (search for similar items in EconPapers)
JEL-codes: E32 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:341747

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