Optimizing agents, exogenous shocks and adjustments in the economy : Real and nominal fluctuations in economies with a wage rigidity
Lempinen, Urho (17.08.1984)
Numero
37Julkaisija
Suomen Pankki
1984
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:bof-201708151544Sisällysluettelo
FOREWORD 7
1 INTRODUCTION 9
1.1 Purpose 9
1.2 Stylized facts 11
1.3 Methodology 12
1.4 Outline of the study and the main results 14
2 OPTIMIZING AGENTS AND MACROECONOMICS: TOPICS IN DYNAMIC MODELLING 17
2.1 Introduction 17
2.2 The simple nonmonetary economy with flexible prices 20
2.3 The monetary economy with the public sector included 41
2.3.1 The public sector and the economy: the idealized case 42
2.3.2 The public sector and the economy: the conventional case 49
2.4 A model of a small open economy 68
2.5 Speculation and fixed exchange rates 77
2.6 Concluding remarks 85
3 SPECULATION AND THE REAL BALANCE EFFECT: THE NEUTRALITY OF STABILIZATION POLICY RECONSIDERED 86
3.1 Introduction 86
3.2 Description of the experiments and the basic argument 89
3.3 Adjustment of the economy to unanticipated shocks 97
3.4 Adjustment of the economy to anticipated shocks with certain timing 100
3.5 Adjustment of the economy to anticipated shocks with uncertain timing 108
3.6 Anticipated shocks with uncertain timing and the neutrality of policy 123
3.7 Neutrality of policy: connections with Fischer and Leijonhufvud 132
3.8 Reality and robustness of the results: critical remarks 137
3.9 Conclusion 142
4 SPECULATION, FIXED EXCHANGE RATES AND THE SMALL OPEN ECONOMY 144
4.1 Introduction 144
4.2 Existence of the endogenous exchange rate cycle: the nonlinear model case 148
4.2.1 Description of the nonlinear model 148
4.2.2 Basic properties of the nonlinear model 162
4.2.3 Existence of speculative exchange rate cycles 170
4.3 Cyclical fluctuations in a small open economy: the linear model case 176
4.3.1 The basic linear model 176
4.3.2 Analytical properties of the basic linear model 187
4.3.3 Predictions of the linear model: the macroeconomic adjustment process of a small open economy 200
4.3.4 Comparison of the results with some other studies 213
4.4 Concluding remarks 216
5 SUMMARY AND POSSIBLE EXTENSION 218
APPENDICES 223
BIBLIOGRAPHY 265
1 INTRODUCTION 9
1.1 Purpose 9
1.2 Stylized facts 11
1.3 Methodology 12
1.4 Outline of the study and the main results 14
2 OPTIMIZING AGENTS AND MACROECONOMICS: TOPICS IN DYNAMIC MODELLING 17
2.1 Introduction 17
2.2 The simple nonmonetary economy with flexible prices 20
2.3 The monetary economy with the public sector included 41
2.3.1 The public sector and the economy: the idealized case 42
2.3.2 The public sector and the economy: the conventional case 49
2.4 A model of a small open economy 68
2.5 Speculation and fixed exchange rates 77
2.6 Concluding remarks 85
3 SPECULATION AND THE REAL BALANCE EFFECT: THE NEUTRALITY OF STABILIZATION POLICY RECONSIDERED 86
3.1 Introduction 86
3.2 Description of the experiments and the basic argument 89
3.3 Adjustment of the economy to unanticipated shocks 97
3.4 Adjustment of the economy to anticipated shocks with certain timing 100
3.5 Adjustment of the economy to anticipated shocks with uncertain timing 108
3.6 Anticipated shocks with uncertain timing and the neutrality of policy 123
3.7 Neutrality of policy: connections with Fischer and Leijonhufvud 132
3.8 Reality and robustness of the results: critical remarks 137
3.9 Conclusion 142
4 SPECULATION, FIXED EXCHANGE RATES AND THE SMALL OPEN ECONOMY 144
4.1 Introduction 144
4.2 Existence of the endogenous exchange rate cycle: the nonlinear model case 148
4.2.1 Description of the nonlinear model 148
4.2.2 Basic properties of the nonlinear model 162
4.2.3 Existence of speculative exchange rate cycles 170
4.3 Cyclical fluctuations in a small open economy: the linear model case 176
4.3.1 The basic linear model 176
4.3.2 Analytical properties of the basic linear model 187
4.3.3 Predictions of the linear model: the macroeconomic adjustment process of a small open economy 200
4.3.4 Comparison of the results with some other studies 213
4.4 Concluding remarks 216
5 SUMMARY AND POSSIBLE EXTENSION 218
APPENDICES 223
BIBLIOGRAPHY 265