A shifting equilibrium model of effective demand is constructed, in which the state of long run expectations is non-constant, and is affected by the disappointment of short-run expectations. It is shown that this model gives rise to cumulative expansions/contractions in nominal income. Changes in the financial fragility of households and firms in the course of these expansions/contractions are then allowed for, together with commercial bank reactions to changing financial fragility. It is shown that turning points in the expansions/contractions of nominal income can arise, resulting in a model of aggregate fluctuations in which the business cycle is aperiodic and of no fixed amplitude.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 16 (2004) Issue (Month): 2 (April) Pages: 207-223 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).
Related research
Keywords:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)