In spite of elaborate descriptive and correlational studies, the most ubiquitous phenomenon in economics, namely inflation, has remained unexplained in terms of its mathematical origins. Keynes had attempted to relate inflation to a mechanism of "sticky wages and prices". Hitherto, such theories...

An analytical innovation enhances microeconomics, enabling it to answer all questions of macroeconomics. It combines the production and consumption decisions of the individual in one model. For each individual, it identifies the customers of what he sells, and the suppliers of what he buys. It...

Market clearing is the central issue in macroeconomics. Two centuries of debate on Say’s Law indicates that the issue is not yet settled. This essay proposes that double coincidence is a necessary condition for market clearing, in addition to the equality of demand and supply at equilibrium...

Deterministic simulations with the Reserve Bank of New Zealand’s core FPS model show how New Zealand’s broad macroeconomic environment might have evolved over the 1990s, if a US nominal yield curve and US TWI exchange rate movements under a common currency arrangement had been...

A Post-Keynesian Stock-Flow Consistent Macroeconomic Growth Model: Preliminary Results Claudio H. Dos Santos (The Levy Economics Institute) Gennaro Zezza (University of Cassino, Italy, and The Levy Economics Institute) Abstract Stock-flow consistent models may be considered the rallying point...

In this paper we assess the stability of open economy backward-looking Phillips curves estimated over two different exchange rate regimes. The pseudo-data employed in our econometric exercise come from the simulation of a New-Keynesian hybrid model suited for performing monetary policy analysis....

We consider linear dynamic models with rational expectations in case of incomplete and asymmetric information as well as agents heterogeneity. This problem requires solving infinite dimensional matrix equations. We propose asymptotic expansion method to reduce this problem to the finite...

Most prices and interest rates display fluctuating levels that embody extractable energy and equivalent amounts of money. Such fluctuations are also associated with varying degrees of uncertainty. Shannon's derivations of spectral entropy and information content offer computational techniques...

A Simplified Stock-Flow Consistent Post-Keynesian Growth Model Claudio H. Dos Santos* and Gennaro Zezza** Abstract: Despite being arguably the most rigorous form of structuralist/post-Keynesian macroeconomics, stock-flow consistent models are quite often complex and difficult to deal with. This...

This paper reviews the existing empirical evidence on the short-term impact on prices of fiscal variables and assesses it against new results from harmonised simulations, conducted with six well-established econometric models used by the ECB and five national central banks (NCBs) of the...