IDEAS home Printed from https://ideas.repec.org/a/bla/metroe/v69y2018i2p444-472.html
   My bibliography  Save this article

A two†sector Keynesian model of business cycles

Author

Listed:
  • Hiroki Murakami

Abstract

In this paper, we examine the effect of sectoral interactions on business cycles in a simple Keynesian model. As a first step for introducing viewpoints of multiple sectors in the context of business cycles, we consider a dual economy in which there are only two kinds of goods: the consumption good and the investment good. By examining a two†sector Keynesian model, we intend to take a look at some phenomena induced by interactions between the consumption good sector and the investment good sector, which cannot be observed in one†sector models. We then find that the stability of equilibrium and the possibility of emergence of a periodic orbit depend on whether the Keynesian stability condition holds or not and that along periodic orbits (business cycles), the consumption good sector lags behind the investment good sector and that the volatility (measured by the ratio of the amplitude of cycles to the equilibrium value) of the investment sector is larger than that of the consumption good sector. Also, we supplement the analysis by performing numerical simulations.

Suggested Citation

  • Hiroki Murakami, 2018. "A two†sector Keynesian model of business cycles," Metroeconomica, Wiley Blackwell, vol. 69(2), pages 444-472, May.
    • Handle: RePEc:bla:metroe:v:69:y:2018:i:2:p:444-472
    DOI: 10.1111/meca.12195
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/meca.12195
    Download Restriction: no
    File URL: https://libkey.io/10.1111/meca.12195?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hiroki Murakami, 2019. "A note on the “unique” business cycle in the Keynesian theory," Metroeconomica, Wiley Blackwell, vol. 70(3), pages 384-404, July.
    2. Elton Beqiraj & Lucrezia Fanti & Luca Zamparelli, 2019. "Sectoral Composition of Output and the Wage Share: a Two-Sector Kaleckian Model," Working Papers 3/19, Sapienza University of Rome, DISS.
    3. Nishi, Hiroshi, 2020. "A two-sector Kaleckian model of growth and distribution with endogenous productivity dynamics," Economic Modelling, Elsevier, vol. 88(C), pages 223-243.
    4. Murakami, Hiroki, 2020. "Monetary policy in the unique growth cycle of post Keynesian systems," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 39-49.
    5. Ricardo Azevedo Araujo & Carlos Eduardo Drumond, 2021. "A two‐sector neo‐Kaleckian model of growth and distribution: Investment allocation and evolutionary dynamics," Metroeconomica, Wiley Blackwell, vol. 72(1), pages 213-236, February.
    6. Lixiao Hao & Vasilios I. Manousiouthakis, 2021. "Sustainability over sets and the business cycle," SN Business & Economics, Springer, vol. 1(6), pages 1-26, June.
    7. Lucrezia Fanti & Luca Zamparelli, 2021. "The paradox of thrift in a two‐sector Kaleckian growth model," Metroeconomica, Wiley Blackwell, vol. 72(3), pages 526-538, July.
    8. Murakami, Hiroki, 2022. "The unique limit cycle in post Keynesian theory," Chaos, Solitons & Fractals, Elsevier, vol. 154(C).
    9. Nishi, Hiroshi, 2018. "A Dynamic Analysis of Demand and Productivity Growth in a Two-sector Kaleckian Model," MPRA Paper 86778, University Library of Munich, Germany.
    10. Nishi, Hiroshi, 2022. "Income distribution, technical change, and economic growth: A two-sector Kalecki–Kaldor approach," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 418-432.
    11. Beqiraj, Elton & Fanti, Lucrezia & Zamparelli, Luca, 2018. "Structural Change and the Wage Share: a Two-Sector Kaleckian Model," MPRA Paper 89558, University Library of Munich, Germany.
    12. Murakami, Hiroki & Zimka, Rudolf, 2020. "On dynamics in a two-sector Keynesian model of business cycles," Chaos, Solitons & Fractals, Elsevier, vol. 130(C).
    13. Beqiraj, Elton & Fanti, Lucrezia & Zamparelli, Luca, 2019. "Sectoral composition of output and the wage share: The role of the service sector," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 1-10.
    14. Cajas Guijarro, John, 2023. "A Classical Marxian Two-Sector Endogenous Cycle Model: Integrating Marx, Dutt, and Goodwin," MPRA Paper 118665, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:metroe:v:69:y:2018:i:2:p:444-472. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0026-1386 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.