Full Employment and Instability: Disentangling Issues on Existence and Stability

Michaël Assous and Vincent Carret
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Vincent Carret: Université Lumière Lyon 2

Chapter Chapter 9 in Modeling Economic Instability, 2022, pp 203-230 from Springer

Abstract: Abstract As we saw, a lot happened between the first models of TinbergenTinbergen, Jan with one marketMarket of raw goods and the beginning of the 1940s when economists used the Keynesian framework to model the dynamics of the whole economy. As we saw in Chaps. 2 , 4 and 5 , TinbergenTinbergen, Jan began to analyze the solutions of mixed difference differential equations which were subsequently used by FrischFrisch, Ragnar and KaleckiKalecki, Michał in the early 1930s to account for the movements of the whole economy. TinbergenTinbergen, Jan also developed linear and nonlinearNonlinearmodel models which included the possibility to account for unstableInstabilitytrajectory trajectories and to stabilize the economy (Chap. 6 ) before designing new economic policiesEconomic policy to reach higher levels of employmentEmploymentlevel and production (Chap. 7 ). Shortly after, SamuelsonSamuelson, Paul A. connected static analysis to stabilityStabilityanalysis analysis and provided a new understanding of Keynesian systems (Chap. 8 ).

Date: 2022
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DOI: 10.1007/978-3-030-90310-7_9

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