Kaldorian assumptions and endogenous fluctuations: a note on Schinasi’s IS–LM model

Results on Schinasi’s (Rev Econ Stud 48:649–653, <CitationRef CitationID="CR12">1981</CitationRef>; J Econ Theory 28:369–375, <CitationRef CitationID="CR13">1982</CitationRef>) variant of the dynamic fixed-price IS–LM model have remained so far confined to Kaldorian type economies, namely to those economies which present a greater-than-unity marginal propensity to spend out of income. This paper shows that, in the case of a negative interest rate sensitivity of savings, stable endogenous cycles can actually emerge as equilibrium solutions of the model also in the case of non-Kaldorian type economies. Copyright Springer-Verlag Berlin Heidelberg 2013