Kaldorian assumptions and endogenous fluctuations. A note on Schinasi’s IS-LM model

BELLA, GIOVANNI;MATTANA, PAOLO;VENTURI, BEATRICE

2013-01-01

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Abstract

Results on Schinasi’s (1981, 1982) variant of the dynamic …xed-price IS-LM model have remained so far con…ned to Kaldorian type economies, namely to those economies which present a greater-than-unity marginal propensity to spend out of income. This paper shows that, in the case of a negative interest rate sensitivity of savings, stable endogenous cycles can actually emerge as equilibrium solutions of the model also in the case of non-Kaldorian type economies