From Keynes to Solow to optimal growth: An encompassing model of monetary and fiscal policy

A dynamic, out-of-equilibrium model of aggregate demand and supply is specified. The existence of, and convergence to, a macroeconomic equilibrium is derived, and the existence of a supporting revealed social utility function is established. Empirical estimates for three recent historical 'eras' suggest the model's explanatory power is impressive. Implications for possible policy repercussions include striking shifts in effect.

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Year of publication:	2009
Authors:	Day, Richard H. ; Yang, Chengyu
Published in:	Journal of Economic Behavior & Organization. - Elsevier, ISSN 0167-2681. - Vol. 72.2009, 2, p. 780-795
Publisher:	Elsevier
Keywords:	Growth Out-of-equilibrium Monetary and fiscal policy Revealed social preference

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008460032