Building on The Dynamics of Keynesian Moneta>)' Growth by Chiarella and Flaschel (2000), this book is a key contribution to business cycle theory, setting out a disequilibrium approach with gradual adjustments of the key macroeconomic variables. Its analytic study of a deterministic model of economic activity, inflation and income distribution integrates elements in the tradition of Keynes, Metzler and Goodwin (KMG). After a qualitative analysis of the basic feedback mechanisms, the authors calibrate the KMG model to the stylized facts of the business cycle in the US economy, and then undertake a detailed numerical investigation of the local and global dynamics generated by the model. Finally, topical issues in monetary policy are studied in small macromodels as well as for the KMG model by incorporating an estimated Taylor-type interest rate reaction function. The stability features of this enhanced model are also compared to those of the original KMG model.

List of figures page x Foreword by Richard H. Day xv Preface xviii Acknowledgments xx Notation xxii General introduction 1 1 Traditional monetary growth dynamics 1.1 Introduction 1.2 Macro foundations of macroeconomics 1.3 Basic Tobin models of monetary growth 1.4 Basic Keynes-Wicksell models of monetary growth 1.5 Basic AS-AD growth models 1.6 The modeling of expectations 1.7 A new integrated approach to Keynesian monetary growth 1.8 Mathematical tools Appendix 2 Tobinian monetary growth: the (neo)Classical point of departure 2.1 The basic equilibrium version of Tobin's model of monetary growth: superneutrality and stability? 2.2 The money-market disequilibrium extension: further stability analysis 2.3 Labor-market disequilibrium and cyclical monetary growth 2.4 General equilibrium with a bond market: concepts of disposable income and Ricardian equivalence 102 vii 2.5 A general disequilibrium version of the neoclassical model of monetary growth 2.6 Outlook: independent investment behavior and Wicksellian price dynamics 3 Keynes-Wicksell models of monetary growth: synthesizing Keynes into the Classics 3.1 The general prototype model 3.2 The intensive form of the model 3.3 The Goodwin growth cycle case 3.4 The Rose employment cycle extension 3.5 Monetary growth cycles: the basic case 3.6 Expectations and the pure monetary cycle 3.7 The real and the monetary cycle in interaction 3.8 Outlook: less than full capacity growth 4 Keynesian monetary growth: the missing prototype 4.1 A general Keynesian model of monetary growth 4.2 Comparative statics: the IS-LM subsector 4.3 Growth cycle implications 4.4 Employment cycle extensions 4.5 Keynesian monetary growth: the basic case 4.6 Monetary and real factors in Keynesian cyclical growth dynamics 4.7 Outlook: adding smooth factor substitution Appendix 1: The Benassy business cycle model Appendix 2: Technical change, wage taxation, average inflation and p-star expectations 5 Smooth factor substitution: a secondary and confused issue 5.1 The Tobin case: one further integrated law of motion 5.2 The Keynes-Wicksell case: increased stability through increased flexibility 5.3 The Keynesian case with smooth factor substitution 5.4 Outlook: sluggish price as well as quantity dynamics 6 Keynesian monetary growth: the working model 6.1 Introduction 6.2 The Kaldor-Tobin model of monetary growth 6.3 An integrated Keynes-Metzler model of monetary growth viii Contents 6.4 A (5 ; 1)-D modification of the six-dimensional Keynes-Metzler model 6.5 Outlook: macroeconometric model building 7 The road ahead 7.1 Endogenous long-run growth and employment 7.2 The dynamic structure of the model 7.3 Analysis of the employment subdynamics 7.4 Analysis of the growth subdynamics 7.5 Analysis of the complete dynamical system 7.6 Some numerical simulations 7.7 Summary and directions for future research References Author index Subject index ix Contents xi List of figures xii List of figures xiii List of figures

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Following an analysis of the relation between a standard Steindlian model of stagnation and Steindl's own analysis, we modify the standard model by introducing endogenous changes in the markup and a reformulation of the investment function. These extensions, which address significant weaknesses of the standard model, find support in Steindl's writing and leave intact some of Steindl's key results. In a further extension, we add a labour market and analyse the stabilizing influence of a Marxian reserve-army mechanism. The implications of the extended model for the effects of increased oligopolization are largely in line with Steindl's predictions.JEL CLASSIFICATION SYSTEM FOR JOURNAL ARTICLES: E24, E31, E32.

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