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MODELING MONETARY MACROECONOMICS: KALECKI RECONSIDERED
Author(s) -
Duménil Gérard,
Lévy Dominique
Publication year - 2012
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2011.04134.x
Subject(s) - economics , business cycle , macroeconomics , investment (military) , monetary economics , general equilibrium theory , keynesian economics , politics , political science , law
This study is devoted to the financing of demand out of income and borrowing , a crucial aspect of Kalecki's analysis of investment. If the demand for loans moves procyclically, short‐term equilibrium is unstable. The borrowing of non‐financial agents must be checked by the action of central banks. Models in which both procyclical and countercyclical mechanisms are considered provide the basis of monetary macroeconomics. Money is neither endogenous nor exogenous but co‐determined by the behaviors of financial and non‐financial agents. The succession of phases in which the stability of the short‐term equilibrium is ensured or not defines an important aspect of the business cycle.