Advances in AS-AD Model Building: Real Disequilibria and Portfolio Choice

Toichiro Asada, Peter Flaschel, Tarik Mouakil and Christian Proaño
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Toichiro Asada: Chuo University
Tarik Mouakil: University of Cambridge

Chapter 2 in Asset Markets, Portfolio Choice and Macroeconomic Activity, 2011, pp 11-26 from Palgrave Macmillan

Abstract: Abstract In this chapter we present two simple macroeconomic models that serve as an introduction to the KMG-Tobin model introduced in the next chapter. The first model, labelled DAS-AD, is a ‘disequilibrium’ extension of the AS-AD growth model of Sargent (1987, ch.5) that exhibits gradually adjusting wages and prices through a pair of modified Phillips curves. The second model introduces portfolio equations in a simple dynamic multiplier model inspired by Blanchard (1981).

Keywords: Stock Market; Central Bank; Hopf Bifurcation; Share Price; Capacity Utilization (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-30777-3_2

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DOI: 10.1057/9780230307773_2

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