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Autonomous demand, multiple equilibria and unemployment dynamics

Author

Listed:
  • Piero Ferri

    (University of Bergamo)

  • Fabio Tramontana

    (Catholic University of the Sacred Heart)

Abstract

The paper presents a medium-run growth model driven by autonomous demand, where aggregate demand and supply interact and unemployment is present and plays different roles. In particular, it generates a feedback from supply to aggregate demand rooted in the presence of heterogeneous consumers and an uncertain environment. Two are the main consequences of this approach. The first is that multiple equilibria can be generated. The second is that equilibria may have different stability properties. In this perspective, growth becomes a dynamic process where initial conditions matter and history plays an important role.

Suggested Citation

  • Piero Ferri & Fabio Tramontana, 2022. "Autonomous demand, multiple equilibria and unemployment dynamics," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 17(1), pages 209-223, January.
    • Handle: RePEc:spr:jeicoo:v:17:y:2022:i:1:d:10.1007_s11403-020-00306-1
    DOI: 10.1007/s11403-020-00306-1
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    References listed on IDEAS

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    More about this item

    Keywords

    Medium-run growth; Autonomous demand; Endogenous supply; Unemployment; Instability; The reconciliation process; Multiple equilibria; Simulations;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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