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Fiscal Policy, Chartal Money, Mark‐up Dynamics and Unemployment Insurance in a Model of Growth and Distribution
Author(s) -
Hannsgen Greg
Publication year - 2014
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/meca.12050
Subject(s) - economics , unemployment , saddle , saddle point , distribution (mathematics) , dynamics (music) , limit cycle , point (geometry) , limit (mathematics) , keynesian economics , macroeconomics , mathematics , physics , mathematical optimization , mathematical analysis , geometry , acoustics
Given one parameter restriction, an output‐stabilization rule for the provision of public services turns a K aldor– K alecki– S teindl growth model with unstable, catastrophe‐prone dynamics into one with a stable limit cycle. In contrast, using a budget‐balancing rule produces a saddle point, along with closed orbits near the boundaries of the state space. Adding K aleckian mark‐up dynamics destabilizes the equilibrium, with a spiraling path followed by a spin‐out found in simulation. A final exercise establishes the possibility of adding a variable workforce and a public unemployment insurance system. Throughout, an identity governs the dynamics of the stocks of public financial liabilities.