Flexibility of wages and macroeconomic instability in an agent-based computational model with endogenous money
We present a model of a dynamic and complex economy in which the creation and the destruction of money result from interactions between multiple and heterogeneous agents. In the baseline scenario, we observe the stabilization of the income distribution between wages and profits. We then alter the model by increasing the flexibility of wages. This change leads to the formation of a deflationary spiral. Aggregate activity decreases and the unemployment increases. The macroeconomic stability of the model is affected and eventually a systemic crisis arises. Finally, we show that the introduction of a minimum wage would have allowed the aggregate demand to be boosted and to avoid this crisis.
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|Date of creation:||Sep 2012|
|Publication status:||Published in Macroeconomic Dynamics, Cambridge University Press (CUP), 2012, 16, pp.284-297. <10.1017/S1365100511000447>|
|Note:||View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00727050|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
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- Pascal Seppecher, 2010.
"Dysfonctionnement bancaire, bulle du crédit et instabilité macroéconomique dans une économie monétaire dynamique et complexe,"
Presses de Sciences-Po, vol. 61(3), pages 441-449.
- Pascal Seppecher, 2010. "Dysfonctionnement bancaire, bulle du crédit et instabilité macroéconomique dans une économie monétaire dynamique et complexe," Post-Print hal-00696783, HAL.
- Pascal Seppecher, 2009. "Un modèle macroéconomique multi-agents avec monnaie endogène," Working Papers halshs-00370716, HAL. Full references (including those not matched with items on IDEAS)
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