<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The article has three aims. The first aim is to develop an improved version of the Keynes-Metzler-Goodwin (the KMG) monetary growth model originally presented and analysed in a series of publications by Carl Chiarella, Peter Flaschel and Willi Semler. The improvement of the model is obtained by modifying some of its equations in a way which ensures that they reflect real macroeconomic dependencies more properly. The equations that have been modified describe final demand expectations, determinants of production decisions, fixed capital accumulation, tax revenues, government budget deficit and money demand. The second aim is to transform the model into an intensive form described by seven non-linear differential equations and determine its unique steady state which shows proportions between variables on the balanced growth path. The third ultimate aim is to present a mathematical proof that the new improved version of the KMG model is locally asymptotically stable.</p>
</abstract>

The article has three aims. The first aim is to develop an improved version of the Keynes-Metzler-Goodwin (the KMG) monetary growth model originally presented and analysed in a series of publications by Carl Chiarella, Peter Flaschel and Willi Semler. The improvement of the model is obtained by modifying some of its equations in a way which ensures that they reflect real macroeconomic dependencies more properly. The equations that have been modified describe final demand expectations, determinants of production decisions, fixed capital accumulation, tax revenues, government budget deficit and money demand. The second aim is to transform the model into an intensive form described by seven non-linear differential equations and determine its unique steady state which shows proportions between variables on the balanced growth path. The third ultimate aim is to present a mathematical proof that the new improved version of the KMG model is locally asymptotically stable.

On the stability of a certain Keynes-Metzler-Goodwin monetary growth model

Poznań University of Economics and Business

Economics and Business Review

This work is licensed under the Creative Commons Attribution 4.0 International License.

{"article-title":"On the stability of a certain Keynes-Metzler-Goodwin monetary growth model"}

The article has three aims. The first aim is to develop an improved version of the Keynes-Metzler-Goodwin (the KMG) monetary growth model originally presented...

On the stability of a certain Keynes-Metzler-Goodwin monetary growth model

Published Online: May 01, 2023

Page range: 26 - 64

Received: Dec 14, 2022

DOI: https://doi.org/10.18559/ebr.2023.1.2

Keywords
Keynesian macroeconomics, disequilibrium macroeconomics, monetary growth models, nonlinear economic, dynamics stability

© 2023 Damian Sołtysiak, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

On the stability of a certain Keynes-Metzler-Goodwin monetary growth model

Published Online: May 01, 2023

Page range: 26 - 64

Received: Dec 14, 2022

DOI: https://doi.org/10.18559/ebr.2023.1.2

KeywordsKeynesian macroeconomics, disequilibrium macroeconomics, monetary growth models, nonlinear economic, dynamics stability

© 2023 Damian Sołtysiak, published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Keywords
Keynesian macroeconomics, disequilibrium macroeconomics, monetary growth models, nonlinear economic, dynamics stability