Intertwined real and monetary stochastic business cycles

Kakarot-Handtke, Egmont (2012): Intertwined real and monetary stochastic business cycles.

Abstract

There is no such thing as a real economy. The task, therefore, is to consistently reconstruct the fluctuations of employment and output from the interactions of real and nominal variables. The present paper does exactly this. No nonempirical concepts like utility, equilibrium, rationality, decreasing returns or perfect competition are applied. The analysis runs rigorously in objective structural axiomatic terms. Therefrom follows that it is the factor cost ratio, i.e. the relation of the nominal variables wage rate and price and the real variable productivity that, for any given level of effective demand, drives the fluctuations of employment and output.

• Item Type: MPRA Paper
• Language: English
• Keywords: new framework of concepts; structure-centric; axiom set; profit; distributed profit; Say’s regime; supersymmetric price; Slutzky-cycle; transaction money; general multiplier
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E10 - General

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