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Monetary growth with disequilibrium: A non-Walrasian baseline model

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  • Ogawa, Shogo

Abstract

In this study, we present a baseline monetary growth model of disequilibrium macroeconomics similar to the existing Keynes-Wicksell model. However, we highlight a characteristic of disequilibrium (non-Walrasian) macroeconomics, specifically the regime dividing in the static model. In addition, because we synthesize demand-side factors (Keynesian) and supply-side factors (neo-classical), we find a new effect on the dynamic feedback loops; that is, the dual-decision effect. This new effect stabilizes/destabilizes an unstable/stable feedback loop when the regime switches from the demand-side to the supply-side. Moreover, this dual-decision effect partly works in the real wage adjustment process and enhances instability if the economy is in a Keynesian regime. We implement numerical experiments to confirm these results, and find that the Walrasian equilibrium itself is not always stable.

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  • Ogawa, Shogo, 2022. "Monetary growth with disequilibrium: A non-Walrasian baseline model," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 512-528.
    • Handle: RePEc:eee:streco:v:62:y:2022:i:c:p:512-528
    DOI: 10.1016/j.strueco.2022.06.001
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    Cited by:

    1. Shogo Ogawa, 2022. "Neoclassical stability and Keynesian instability: A two‐sector disequilibrium approach," Metroeconomica, Wiley Blackwell, vol. 73(2), pages 481-513, May.
    2. Sołtysiak Damian, 2023. "On the stability of a certain Keynes-Metzler-Goodwin monetary growth model," Economics and Business Review, Sciendo, vol. 9(1), pages 26-64, April.
    3. Shogo Ogawa & Hiroaki Sasaki, 2022. "Numerical analysis of the disequilibrium monetary growth model: secular stagnation, slow convergence, and cyclical fluctuations," Evolutionary and Institutional Economics Review, Springer, vol. 19(1), pages 369-394, April.

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    More about this item

    Keywords

    Disequilibrium macroeconomics; Monetary growth model; Non Walrasian analysis; Keynesian unemployment;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models

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