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J. Risk Financial Manag. 2015, 8(3), 285-310; doi:10.3390/jrfm8030285

Inflation and Speculation in a Dynamic Macroeconomic Model

1
McMaster University, 1280 Main St. W, Hamilton, ON L8S 4L8, Canada
2
Université Paris-Est, CERMICS, Projet RISKERGY, 6-8 Av. Blaise Pascal, 77455Champs-sur-Marne, France
*
Author to whom correspondence should be addressed.
Academic Editors: Chia-Lin Chang and Coenraad Labuschagne
Received: 10 December 2014 / Revised: 1 June 2015 / Accepted: 9 June 2015 / Published: 6 July 2015
View Full-Text   |   Download PDF [1546 KB, uploaded 6 July 2015]   |  

Abstract

We study a monetary version of the Keen model by merging two alternative extensions, namely the addition of a dynamic price level and the introduction of speculation. We recall and study old and new equilibria, together with their local stability analysis. This includes a state of recession associated with a deflationary regime and characterized by falling employment but constant wage shares, with or without an accompanying debt crisis. View Full-Text
Keywords: Minsky’s financial instability hypothesis; debt-deflation; Keen model; stock-flow consistency; financial crisis; dynamical systems in macroeconomics; local stability Minsky’s financial instability hypothesis; debt-deflation; Keen model; stock-flow consistency; financial crisis; dynamical systems in macroeconomics; local stability
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Grasselli, M.R.; Huu, A.N. Inflation and Speculation in a Dynamic Macroeconomic Model. J. Risk Financial Manag. 2015, 8, 285-310.

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