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The evolution of endogenous business cycles
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Farmer, Roger E. A. (2016) The evolution of endogenous business cycles. Macroeconomic Dynamics, 20 (2). pp. 544-557. doi:10.1017/S1365100514000248 ISSN 1365-1005.
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Official URL: http://dx.doi.org/10.1017/S1365100514000248
Abstract
This paper distinguishes two kinds of endogenous business cycle models: EBC1 models, which display dynamic indeterminacy, and EBC2 models, which display steady-state indeterminacy. Both strands of the literature have their origins in the sunspot literature that developed at the University of Pennsylvania in the 1980s. I argue that EBC1 models are part of the evolution of modern macroeconomics that has classical roots dating back to the 1920s. EBC2 models provide a microfoundation for one of the most important ideas to emerge from Keynes's (1936) General Theory of Employment, Interest and Money: that high involuntary unemployment can persist as part of the steady-state equilibrium of a market economy.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HB Economic Theory | ||||||||
Divisions: | Faculty of Social Sciences > Economics | ||||||||
Library of Congress Subject Headings (LCSH): | Business cycles -- Mathematical mdoels, Macroeconomics -- Mathematical models, University of Pennsylvania, Keynes, John Maynard, 1883-1946 -- Influence | ||||||||
Journal or Publication Title: | Macroeconomic Dynamics | ||||||||
Publisher: | Cambridge University Press | ||||||||
ISSN: | 1365-1005 | ||||||||
Official Date: | March 2016 | ||||||||
Dates: |
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Volume: | 20 | ||||||||
Number: | 2 | ||||||||
Page Range: | pp. 544-557 | ||||||||
DOI: | 10.1017/S1365100514000248 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 20 February 2018 | ||||||||
Date of first compliant Open Access: | 22 February 2018 |
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