Advanced Search
MyIDEAS: Login to save this paper or follow this series

A Dynamic IS-LM Model with Adaptive Expectations

Contents:

Author Info

  • Moisa Altar

    (Faculty of Finance and Banking, Bucharest University of Economics)

Abstract

We analyze the stability of a discrete-time dynamic model with an IS-LM structure. We assume that the Aggregate Supply function is of Lucas type, and the monetary policy rule is of Friedman type. The mechanism of expectations formation is assumed to be of adaptive type (Friedman-Cagan). In its final form, the model contains two state variables, namely money supply and expected inflation. From the mathematical point of view, it is an affine discrete-time system, whose stability properties are analyzed in the paper. We deduce sufficient conditions concerning the "learning coefficient" involved in the Friedman-Cagan type of forecast equation, so that the model is stable.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. 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.
File URL: http://www.dofin.ase.ro/carfib/wpaefr/wpaefr_15.pdf
File Function: First version, 2008
Download Restriction: no

Bibliographic Info

Paper provided by Bucharest University of Economics, Center for Advanced Research in Finance and Banking - CARFIB in its series Advances in Economic and Financial Research - DOFIN Working Paper Series with number 15.

as in new window
Length:
Date of creation: Aug 2008
Date of revision:
Handle: RePEc:cab:wpaefr:15

Contact details of provider:
Postal: 6 ROMANA PLACE, 70167 - BUCHAREST
Phone: 0040-01-2112650
Fax: 0040-01-3129549
Email:
Web page: http://www.dofin.ase.ro/carfib/
More information through EDIRC

Related research

Keywords: steady state; Lucas type AS function; Friedman type monetary policy rule; stability conditions;

Find related papers by JEL classification:

References

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.:
as in new window
  1. Umberto Neri & Beatrice Venturi, 2007. "Stability and bifurcations in IS-LM economic models," International Review of Economics, Springer, vol. 54(1), pages 53-65, March.
  2. McCallum, Bennett T & Nelson, Edward, 1999. "An Optimizing IS-LM Specification for Monetary Policy and Business Cycle Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(3), pages 296-316, August.
  3. Casares, Miguel & McCallum, Bennett T., 2006. "An optimizing IS-LM framework with endogenous investment," Journal of Macroeconomics, Elsevier, vol. 28(4), pages 621-644, December.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cab:wpaefr:15. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ciprian Necula) The email address of this maintainer does not seem to be valid anymore. Please ask Ciprian Necula to update the entry or send us the correct address.

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.