In this paper we develop a theoretical framework to analyze the long-run behavior of an economy characterized by a regime of persistent debt. We introduce a stock-flow consistent dynamic model where the economic system is represented by a network of trading relationships among agents. Debt...

In this paper we give a clear-cut explanation to the sluggish wage adjustments which are commonly experienced also in face of involuntary unemployment. We prove that unemployment may be the physiological outcome of rational decisions by competing workers who may find it optimal to ask higher...