EconPapers    
Economics at your fingertips  
 

Income distribution, credit and fiscal policies in an agent-based keynesian model

Giovanni Dosi (), Giorgio Fagiolo (), Mauro Napoletano () and Andrea Roventini

Working Papers from HAL

Abstract: This work studies the interactions between income distribution and monetary and fiscal policies in terms of ensuing dynamics of macro variables (GDP growth, unemployment etc.) on the grounds of an agent-based Keynesian model. The direct ancestor of this work is the "Keynes meeting Schumpeter" formalism presented in Dosi et al. (2010). To that model, we add a banking sector and a monetary authority setting interest rates and credit lending conditions. The model combines Keynesian mechanisms of demand generation, a "Schumpeterian" innovation-fueled process of growth and Minskian credit dynamics. The robustness of the model is checked against its capability to jointly account for a large set of empirical regularities both at the micro level and at the macro one. The model is able to catch salient features underlying the current as well as previous recessions, the impact of financial factors and the role in them of income distribution. We found that different income distribution regimes heavily a affect macroeconomic performance: more unequal economies are exposed to more severe business cycles fuctuations, higher unemployment rates, and higher probability of crises. On the policy side, fiscal policies do not only dampen business cycles, reduce unemployment and the likelihood of experiencing a huge crisis. In some circumstances they also affect positively long-term growth. Further, the more income distribution is skewed toward profits, the greater the effects of fiscal policies. About monetary policy, we find a strong non-linearity in the way interest rates affect macroeconomic dynamics: in one "regime" with low rates, changes in interest rates are ineffective up to a threshold beyond which increasing the interest rate implies smaller output growth rates and larger output, volatility, unemployment and likelihood of crises.

Date: 2012-02
Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-01070285
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
https://hal-sciencespo.archives-ouvertes.fr/hal-01070285/document (application/pdf)

Related works:
Journal Article: Income distribution, credit and fiscal policies in an agent-based Keynesian model (2013) Downloads
Working Paper: Income Distribution, Credit and Fiscal Policies in an Agent-Based Keynesian Model (2012) Downloads
Working Paper: Income Distribution, Credit and Fiscal Policies in an Agent-Based Keynesian Model (2012) Downloads
Working Paper: Income distribution, credit and fiscal policies in an agent-based keynesian model (2012) Downloads
Working Paper: Income Distribution, Credit and Fiscal Policies in an Agent-Based Keynesian Model (2012) Downloads
Working Paper: Income Distribution, Credit and Fiscal Policies in an Agent-Based Keynesian Model (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01070285

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2020-05-21
Handle: RePEc:hal:wpaper:hal-01070285