In this paper we reconsider extensions and modifications of earlierwork on a disequilibrium model of AS-AD growth. Our dynamicmodel exhibits more or less sluggishly adjusting prices and quantities,Keynesian demand rationing and fluctuating capacity utilization forboth labor and capital. Firms...

We investigate important macroeconomic and macroeeonometricfeedback channels in models that concern the dynamic interaction of the labormarket, product market and the monetary and financial sector. The core ofour study is an applied disequilibrium model of monetary growth of a smallopen economy....

The paper reconsiders an influential model by Blanchard (1981) that extends the textbook ISLMframework by including among the financial assets, besides money and short-term bonds,also long-term bonds and equities. Aggregate demand is supposed to vary with Tobin's (average)q, rather than the real...

The financial instability and its spillover to the real sector have become a great challenge to macro-economic theory. The book takes a Keynesian theoretical perspective, representing an attempt to revive what Keynes stressed in his General Theory, namely the role of the financial market in...

Many monetary and fiscal policy measures have aimed at mitigating the effects of the financial market meltdown that started in the U.S. subprime sector in 2008 and has subsequently spread world wide as a great recession. Slowly some recovery appears to be on the horizon, yet it is worthwhile...

The aim of this paper is to develop an optimal long-term bondinvestment strategy which can be applied to real market situations. Thispaper employs Merton?s intertemporal framework to accommodate the featuresof a stochastic interest rate and the time-varying dynamics of bondreturns.The long-term...

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...

In this paper we construct a model of stock market, interest rate and output interaction which is a generalization of the well known 1981 model of Blanchard. We allow for imperfect substitutability between stocks and bonds in the asset market and for lagged portfolio adjustment. The reaction of...

We reformulate the traditional AS-AD growth model of the Neoclassical synthesis, stage I, as adisequilibrium approach to aggregate supply analysis, with sticky wages, sticky prices, myopic perfectforesight on current inflation rates, and adaptively formed medium-run expectations concerningthe...

We reformulate and extend the standard AS-AD growth model of the NeoclassicalSynthesis (stage I) with its traditional microfoundations. The model still hasan LM curve in the place of a Taylor interest rate rule, exhibits sticky wages as wellas sticky prices, myopic perfect foresight of current...