Monetary disequilibrium, endogenous money, stability and the determinacy of inflation

David Chappell, Kent Matthews

Research output: Journal PublicationArticlepeer-review

3 Citations (Scopus)

Abstract

This paper examines the stability of the disequilibrium money model, with endogenous money and transitory interest rate control by the Central Bank. In the tradition of the post-Keynesian literature, the money supply is determined by bank lending and disequilibrium between money demand and supply determines the business cycle. The rate of interest is assumed to react to an inflation target and inflation responds to the business cycle. The paper examines the stability of the model under three inflation response systems: the accelerationist model, adaptive expectations and rational expectations.

Original languageEnglish
Pages (from-to)145-161
Number of pages17
JournalEconomic Notes
Volume30
Issue number1
DOIs
Publication statusPublished - 1 Jan 2001
Externally publishedYes

ASJC Scopus subject areas

  • Economics and Econometrics

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