The feedback channels in macroeconomics: analytical foundations for structural econometric model building

We investigate important macroeconomic and macroeeonometricfeedback channels in models that concern the dynamic interaction of the labormarket, product market and the monetary and financial sector. The core ofour study is an applied disequilibrium model of monetary growth of a smallopen economy. After surveying the feedback channels we consider a compactdescription of the intensive fonn of the model. We consider various types ofsubsystems, the integration of which is subsequently compared from the perspectiveof bifurcation diagrams that separate eases of asymptotic stability fromstable cyclical behavior as well as pure explosiveness. In this way we layouta research strategy, which will show, in contrast to what is generally believed,that applied integrated macrodynamic systems can have a variety of interestingaltraetors and transient dynamics, which are obtained in particular whenlocally explosive situations are turned into bounded dynamics by the additionof specifically tailored extrinsic nonlinearities.