In this paper we present a theoretical disequilibrium growth model of an open economy with a full set of markets and sectors and with heterogeneous agents in the household sector. This model allows, on the one hand, for basic consistency checks, such as fully specified bedget identities and a...

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...

In this paper we reconsider a model of Blanchard and Fisher which reformulated Keynesian IS-LM analysis from the perspective of a richer array of financial assets, namely short-term and long-term bonds, and thus from the perspective of the term structure of interest rates. The basic change in...

In this paper we reconsider a macrodynamic model of Blanchard, which integrates output and stock market dynamics in a fundamental way. We add budget equations (and their implications) to all sectors of the economy, and also capital accumulation and growth (but not yet proper wage-price dynamics)...

In the framework of a Keynesian monetary macro model we study implications of kinked Phillips curves and alternative monetary policy rules. As alternative monetary policy rules we consider monetary growth targeting and interest rate targeting (the Taylor rule). Our monetary macro model exhibits:...

In this paper we consider the applied structural model of diequilibrium growth that we introduced in a previous paper. In particular we express the model in terms of intensive form variables which turn out to be governed by a set of 39D dynamic equations. We consider the model from the...

We formulate a macro-model of a small open economy in order to investigate the relative performance of rules that respond to asset prices and those that do not. Our model consists of three asset prices: the stock price, the long-term interest rate and the exchange rate. These asset prices...

In this paper, the authors reformulate the theoretical baseline DAS-AD model of Asada, Chen, Chiarella and Flaschel (2004) to allow-following Chen, Chiarella, Flaschel and Semmler (2005)-for its empirical estimation. The version of the model used here exhibits a Taylor interest rate rule in the...

After the breakdown of aggregate investment observed after the 1997-98 East Asian crisis, in almost all countries which suffered from sharp nominal devaluations, academicians and policymakers have engaged in a hot debate about the adequate monetary policy strategy against a speculative attack on...