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Inflation and Speculation in a Dynamic Macroeconomic Model

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McMaster University, 1280 Main St. W, Hamilton, ON L8S 4L8, Canada
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Université Paris-Est, CERMICS, Projet RISKERGY, 6-8 Av. Blaise Pascal, 77455Champs-sur-Marne, France
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Author to whom correspondence should be addressed.
Academic Editors: Chia-Lin Chang and Coenraad Labuschagne
J. Risk Financial Manag. 2015, 8(3), 285-310; https://doi.org/10.3390/jrfm8030285
Received: 10 December 2014 / Revised: 1 June 2015 / Accepted: 9 June 2015 / Published: 6 July 2015
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
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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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