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Fisher, Keynes, and the Corridor of Stability

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  • Robert W. Dimand

Abstract

. This chapter draws on the debt‐deflation process of Fisher (1933) as well as on Keynes (1936, chapter 19) and Tobin (1975, 1980) to explore the concept of a corridor of stability, where an economy will be self‐adjusting only for demand shocks small enough to leave it within that corridor.

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  • Robert W. Dimand, 2005. "Fisher, Keynes, and the Corridor of Stability," American Journal of Economics and Sociology, Wiley Blackwell, vol. 64(1), pages 185-199, January.
    • Handle: RePEc:bla:ajecsc:v:64:y:2005:i:1:p:185-199
    DOI: 10.1111/j.1536-7150.2005.00357.x
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    Cited by:

    1. Mittnik, Stefan & Semmler, Willi, 2018. "Overleveraging, Financial Fragility, And The Banking–Macro Link: Theory And Empirical Evidence," Macroeconomic Dynamics, Cambridge University Press, vol. 22(1), pages 4-32, January.
    2. Mittnik, Stefan & Semmler, Willi, 2013. "The real consequences of financial stress," Journal of Economic Dynamics and Control, Elsevier, vol. 37(8), pages 1479-1499.
    3. Petar Sorić & Ivana Lolić & Marina Matošec, 2023. "The persistence of economic sentiment: a trip down memory lane," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 18(2), pages 371-395, April.
    4. Subrata Guha, 2011. "The necessary condition for stability in Tobin's Walras-Keynes-Phillips model: A note," Economics Bulletin, AccessEcon, vol. 31(1), pages 66-74.
    5. Thomas I. Palley, 2008. "Keynesian Models of Deflation and Depression Revisited: Inside Debt and Price Flexibility," Working Papers wp169, Political Economy Research Institute, University of Massachusetts at Amherst.
    6. Agarwal, Manmohan & Walsh, Sean & Wang, Jing & Whalley, John & Yan, Chen, 2013. "Expected worsening or improving financial instability and the 2008 financial crisis," The North American Journal of Economics and Finance, Elsevier, vol. 26(C), pages 92-105.
    7. Robert W. Dimand, 2014. "James Tobin and Modern Monetary Theory," Center for the History of Political Economy Working Paper Series 2014-5, Center for the History of Political Economy.
    8. Willi Semmler & Gabriel R. Padró Rosario & Levent Koçkesen, 2023. "Liquidity and Business Cycles—With Occasional Disruptions," Econometrics, MDPI, vol. 11(4), pages 1-20, December.
    9. John Whalley & Manmohan Agarwal & Jing Wang & Sean Walsh & Chen Yan, 2011. "Linking External Sector Imbalances and Changing Financial Instability before the 2008 Financial Crisis," NBER Working Papers 17645, National Bureau of Economic Research, Inc.
    10. Palley, Thomas I., 2008. "Keynesian models of deflation and depression revisited," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 167-177, October.
    11. Willi Semmler & Fabio Della Rossa & Giuseppe Orlando & Gabriel R. Padro Rosario & Levent Kockesen, 2023. "Endogenous Economic Resilience, Loss of Resilience, Persistent Cycles, Multiple Attractors, and Disruptive Contractions," Working Papers 2309, New School for Social Research, Department of Economics.

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