Article ID: | iaor2009393 |
Country: | Germany |
Volume: | 9 |
Issue: | 1/2 |
Start Page Number: | 119 |
End Page Number: | 145 |
Publication Date: | Jul 2001 |
Journal: | Central European Journal of Operations Research |
Authors: | Chiarella Carl, Flaschel Peter, Semmler Willi |
In this paper we reconsider extensions and modifications of earlier work on a disequilibrium model of AS-AD growth. Our dynamic model exhibits more or less sluggishly adjusting prices and quantities, Keynesian demand rationing and fluctuating capacity utilization for both labor and capital. Firms use debt (and pure profits) to finance their investment expenditures. We first prove that the resulting 7D core dynamics are convergent broadly speaking for low adjustment speeds.