A baseline integration of commercial banks into the disequilibrium framework with behavioral traders of Charpe et al. (2011, 2012) is presented. At the core of the analysis is the impact the banking sector exerts on the interaction of real and financial markets. Potentially destabilizing...

We consider an alternative modelling approach to the mainstream DSGE paradigm, namely basically a Dynamic Stochastic General Disequilibrium model of continuous adjustment processes on interacting real and financial markets. We introduce heterogeneous capital gain expectations (chartists and...

We consider an alternative modelling approach to the mainstream DSGE paradigm, namely a Dynamic Stochastic General Disequilibrium (DSGD) baseline model of continuous and gradual adjustment processes on interacting real and financial markets. Heterogeneous capital gain expectations (chartists and...

We show that the Kaldor (1940) trade cycle mechanism can be meaningfully applied to the market for residential housing space, since the demand for houses may be positively related to the housing price in a mid-range price domain, while it is downward sloping for house prices sufficiently small...

Die Verbraucherpreise lagen in Deutschland im Jahresdurchschnitt 2023 um 5,9% höher als im Vorjahr. Basierend auf den 110 Einzelkomponenten des Verbraucherpreisindex (VPI) analysieren wir, wie sich die hohe Inflationsdynamik im Jahr 2023 auf verschiedene Waren und Dienstleistungen verteilt hat....

In the present paper, we study how the dynamics of Foley's model may be affected by the introduction of a money wage Phillips curve with a perfect spill-over of price inflation on wage inflation. The upshot is a model with endogenous price and wage dynamics with unstable equilibrium, meaning...

We examine the impact of corporate currency hedging on economic stability by introducing hedging activity in a Mundell-Fleming-Tobin framework for analyzing currency and financial crises. The ratio between hedged and unhedged firms is modelled depending on firm size as well as hedging costs. The...

This paper explores the linkage between corporate risk management strategies, investment, and economic stability in an open economy with a flexible exchange rate regime. Firms use currency futures contracts to manage their exchange rate exposure - caused by balance sheet effects as in Krugman...

The paper is concerned with determinacy in a version of the New-Keynesian model that integrates imperfect competition and nominal price and wage setting on goods and labour markets. The model is reformulated with an explicit period of arbitrary length and shown to remain well-defined as the...

Currently, many monetary and fiscal policy measures are aimed at preventing the financial market meltdown that started in the US subprime sector and has spread worldwide as a great recession. Although some slow recovery appears to be on the horizon, it is worthwhile exploring the fragility and...