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Intertwined real and monetary stochastic business cycles

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  • Kakarot-Handtke, Egmont

Abstract

There is no such thing as a real economy. The task, therefore, is to consistently reconstruct the fluctuations of employment and output from the interactions of real and nominal variables. The present paper does exactly this. No nonempirical concepts like utility, equilibrium, rationality, decreasing returns or perfect competition are applied. The analysis runs rigorously in objective structural axiomatic terms. Therefrom follows that it is the factor cost ratio, i.e. the relation of the nominal variables wage rate and price and the real variable productivity that, for any given level of effective demand, drives the fluctuations of employment and output.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 42793.

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Date of creation: 22 Nov 2012
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Handle: RePEc:pra:mprapa:42793

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Keywords: new framework of concepts; structure-centric; axiom set; profit; distributed profit; Say’s regime; supersymmetric price; Slutzky-cycle; transaction money; general multiplier;

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  1. Hoover, Kevin D, 1984. "Two Types of Monetarism," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 22(1), pages 58-76, March.
  2. Wynne Godley & Anwar Shaikh, 2002. "An Important Inconsistency at the Heart of the Standard Macroeconomic Model," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 24(3), pages 423-441, April.
  3. Edward N. Gamber & Frederick L. Joutz, 1997. "Real Wages over the Business Cycle," Eastern Economic Journal, Eastern Economic Association, Eastern Economic Association, vol. 23(3), pages 277-291, Summer.
  4. Kakarot-Handtke, Egmont, 2011. "When Ricardo saw profit, he called it rent: on the vice of parochial realism," MPRA Paper, University Library of Munich, Germany 33625, University Library of Munich, Germany.
  5. Weintraub, E Roy, 1970. "Stochastic Stability of a General Equilibrium Model," American Economic Review, American Economic Association, American Economic Association, vol. 60(2), pages 380-84, May.
  6. Kyun,Kim, 1988. "Equilibrium Business Cycle Theory in Historical Perspective," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521350785.
  7. King, Robert G & Plosser, Charles I, 1984. "Money, Credit, and Prices in a Real Business Cycle," American Economic Review, American Economic Association, American Economic Association, vol. 74(3), pages 363-80, June.
  8. Robert G. King & Charles I. Plosser, 1982. "The Behavior of Money, Credit, and Prices in a Real Business Cycle," NBER Working Papers, National Bureau of Economic Research, Inc 0853, National Bureau of Economic Research, Inc.
  9. Kakarot-Handtke, Egmont, 2012. "General formal foundations of the virtuous deficit–profit symmetry and the vicious debt deflation," MPRA Paper, University Library of Munich, Germany 42912, University Library of Munich, Germany.
  10. Buiter, Willem H, 1980. "Walras' Law and All That: Budget Constraints and Balance Sheet Constraints in Period Models and Continuous Time Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 1-16, February.
  11. Kakarot-Handtke, Egmont, 2011. "Schumpeter and the essence of profit," MPRA Paper, University Library of Munich, Germany 31176, University Library of Munich, Germany.
  12. Frank Ackerman, 2001. "Still dead after all these years: interpreting the failure of general equilibrium theory," Journal of Economic Methodology, Taylor & Francis Journals, Taylor & Francis Journals, vol. 9(2), pages 119-139.
  13. Keuzenkamp, H.A. & McAleer, M., 1994. "Simplicity, scientific inference and econometric modelling," Discussion Paper, Tilburg University, Center for Economic Research 1994-56, Tilburg University, Center for Economic Research.
  14. Tomasson, Gunnar & Bezemer, Dirk J, 2010. "What is the Source of Profit and Interest? A Classical Conundrum Reconsidered," MPRA Paper, University Library of Munich, Germany 20320, University Library of Munich, Germany.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. There is no such thing as a real economy
    by Economic Logician in Economic Logic on 2012-12-28 15:07:00

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