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Full-Text Articles in Social and Behavioral Sciences
Walrasian Indeterminacy And Keynesian Macroeconomics, John Geanakoplos, Heracles M. Polemarchakis
Walrasian Indeterminacy And Keynesian Macroeconomics, John Geanakoplos, Heracles M. Polemarchakis
Cowles Foundation Discussion Papers
Overlapping generations models with or without production or a portfolio demand for money display a fundamental indeterminacy. Expectations matter; and they are not, in the short run, constrained by the hypotheses of agent optimization, rational expectations, and market clearing. No short run policy analysis is possible without some explicit understanding of how agents expect the economy to respond to the policy. In this framework of perfect foresight and market clearing prices, it is possible to make Keynesian assumptions about the rigidity of money wages and the exogeneity of “animal spirits” of investors, to use the standard IS-LM apparatus, and to …
Comparative Statics And Local Indeterminacy In Olg Economies: An Application Of The Multiplicative Ergodic Theorem, John Geanakoplos, Donald J. Brown
Comparative Statics And Local Indeterminacy In Olg Economies: An Application Of The Multiplicative Ergodic Theorem, John Geanakoplos, Donald J. Brown
Cowles Foundation Discussion Papers
This study is an effort to give a simple measure of the local size of the equilibrium set of OLG economies in which there may be more than one good and more than one consumer per period, and in which the generations may differ across time.