Macroeconomic stabilization policies in intrinsically unstable macroeconomies

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dc.contributor.author Chiarella, Carl en_US
dc.contributor.author Flaschel, Peter en_US
dc.contributor.author Koper, Carsten en_US
dc.contributor.author Proano, C en_US
dc.contributor.author Semmler, Willi en_US
dc.contributor.editor en_US
dc.date.accessioned 2012-10-12T03:32:50Z
dc.date.available 2012-10-12T03:32:50Z
dc.date.issued 2012 en_US
dc.identifier 2011004385 en_US
dc.identifier.citation Chiarella Carl et al. 2012, 'Macroeconomic stabilization policies in intrinsically unstable macroeconomies', de Gruyter, vol. 16, no. 2, pp. art2 en_US
dc.identifier.issn 1081-1826 en_US
dc.identifier.other C1 en_US
dc.identifier.uri http://hdl.handle.net/10453/17962
dc.description.abstract Many monetary and fiscal policy measures have aimed at mitigating the effects of the financial market meltdown that started in the U. S. subprime sector in 2008 and has subsequently spread world wide as a great recession. Slowly some recovery appears to be on the horizon, yet it is worthwhile exploring the fragility and potentially destabilizing feedbacks of advanced macroeconomies in the context of a framework that builds on the ideas of Keynes and Tobin. This framework stresses the fragilities and destabilizing feedback mechanisms that are potential features of all major markets-those for goods, labor, and financial assets. We use a Tobin macroeconomic portfolio approach and the interaction of heterogeneous agents on the financial market to characterize the potential for financial market instability. Though the study of the latter has been undertaken in many partial models, we focus here on the interconnectedness of all three markets. Furthermore, we study what potential labor market, fiscal and monetary policies can have in stabilizing unstable macroeconomies. In order to study this problem we introduce, besides money, long term bonds and equity into the asset market. We in particular propose a countercyclical monetary policy that sells assets in the boom and purchases them in recessions. Modern stability analysis is brought to bear to demonstrate the stabilizing effects of the suggested policies. The policies suggested here could help the Fed in its search for an appropriate exit strategy after its massive intervention in the financial market. en_US
dc.language en_US
dc.publisher de Gruyter en_US
dc.rights The final publication is available at www.degruyter.com
dc.title Macroeconomic stabilization policies in intrinsically unstable macroeconomies en_US
dc.parent Studies in NonLinear Dynamics and Econometrics en_US
dc.journal.volume 16 en_US
dc.journal.number 2 en_US
dc.publocation Germany en_US
dc.identifier.startpage 1 en_US
dc.identifier.endpage en_US
dc.identifier.endpage 36 en_US
dc.cauo.name BUS.Finance en_US
dc.conference Verified OK en_US
dc.for 010200 en_US
dc.personcode 716350 en_US
dc.personcode 0000017722 en_US
dc.personcode 0000020851 en_US
dc.personcode 0000069875 en_US
dc.personcode 0000017791 en_US
dc.percentage 50 en_US
dc.classification.name Applied Mathematics en_US
dc.classification.type FOR-08 en_US
dc.edition en_US
dc.custom en_US
dc.date.activity en_US
dc.location.activity en_US
dc.description.keywords en_US


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