Abstract
In this chapter, a simple Keynesian macroeconomic model of monetary policy describing the development of nominal rate of interest, expected rate of inflation, and nominal money supply in the period of deflationary depression, which was introduced by Asada (2011) is investigated rigorously. The normal equilibrium point of the model is derived and its dynamic stability is investigated. Questions concerning the existence of limit cycles are studied analytically. The bifurcation equation is found. The formulae for the calculation of its coefficients are gained. A numerical example is presented by means of numerical simulations.
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References
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Acknowledgments
This publication was financially supported by the Project: Mobility—enhancing research, science and education at the Matej Bel University, ITMS code: 26110230082, under the Operational Program Education co-financed by the European Social Fund. This research was also financially supported by Chuo University Grant for Special Research, the Japan Society for the Promotion of Science (Grant-in Aid (C) 25380238), and the MEXT-Supported Program for the Strategic Research Foundation at Private University 2013–2017. Needless to say, however, only the authors are responsible for possible remaining errors.
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Asada, T., Demetrian, M., Zimka, R. (2016). The Stability of Normal Equilibrium Point and the Existence of Limit Cycles in a Simple Keynesian Macrodynamic Model of Monetary Policy. In: Matsumoto, A., Szidarovszky, F., Asada, T. (eds) Essays in Economic Dynamics. Springer, Singapore. https://doi.org/10.1007/978-981-10-1521-2_9
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DOI: https://doi.org/10.1007/978-981-10-1521-2_9
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