Semmler Willi; Mittnik Stefan; Chiarella Carl; Zhu Peiyuan - 2002
In this paper we construct a model of stock market, interest rate and output interaction whichis a generalization of the well known 1981 model of Blanchard. We allow for imperfect substitutabilitybetween stocks and bonds in the asset market and for lagged portfolio adjustment. Thereaction of...