As recent experience suggests, the most significant economic fluctuations are those that combine real and financial factors. This paper works out a simple mode lthat couples a version of Goodwin's (1967) growth cycle model of rea lfluctuations with insights drawn from a model of financial fluctuations based on Minsky's financial instability hypothesis (Vercelli, 2000; Sordi and Vercelli, 2006, 2012). The model suggested substantially modifies that of Keen(1995), who combined insights from Goodwin and Minsky within a model of fluctuating growth. In the real part of the model we introduce the possibility of disequilibrium in the goods market and formalize a mechanism of output adjustment based on the conventional dynamic multiplier. The model so obtained may exhibit persistent dynamics and provide insights to enable better understanding of the nature of real-world fluctuations.

Sordi, S., Vercelli, A. (2014). Unemployment, income distribution and debt-financed investment in a growth cycle model. JOURNAL OF ECONOMIC DYNAMICS & CONTROL, 48(11), 325-348 [10.1016/j.jedc.2014.09.030].

Unemployment, income distribution and debt-financed investment in a growth cycle model

SORDI, SERENA;VERCELLI, ALESSANDRO
2014-01-01

Abstract

As recent experience suggests, the most significant economic fluctuations are those that combine real and financial factors. This paper works out a simple mode lthat couples a version of Goodwin's (1967) growth cycle model of rea lfluctuations with insights drawn from a model of financial fluctuations based on Minsky's financial instability hypothesis (Vercelli, 2000; Sordi and Vercelli, 2006, 2012). The model suggested substantially modifies that of Keen(1995), who combined insights from Goodwin and Minsky within a model of fluctuating growth. In the real part of the model we introduce the possibility of disequilibrium in the goods market and formalize a mechanism of output adjustment based on the conventional dynamic multiplier. The model so obtained may exhibit persistent dynamics and provide insights to enable better understanding of the nature of real-world fluctuations.
2014
Sordi, S., Vercelli, A. (2014). Unemployment, income distribution and debt-financed investment in a growth cycle model. JOURNAL OF ECONOMIC DYNAMICS & CONTROL, 48(11), 325-348 [10.1016/j.jedc.2014.09.030].
File in questo prodotto:
File Dimensione Formato  
2014_SV_JEDC.pdf

non disponibili

Tipologia: Post-print
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 945.33 kB
Formato Adobe PDF
945.33 kB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11365/47724
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo