Prevailing trade theory is a neglected stepchild of economics. Micro rejects the sole reason for trade’s occurrence. It declares zero profit in equilibrium. Monetary theory and macroeconomics dismiss concerns of trade financing. They assert that money has nothing to do with traded output, but...

This paper investigates the dynamics of output, employment and prices in an economy with costs of adjusting labor and prices. In an economy with non convex adjustments costs, firms do not adjust labor and prices continuously to accommodate every shift in demand. Rather, firms adjust employment...

Keynes (1936) said that shortage of money caused by hoarding or failure to invest led to unemployment, but Lucas (1972) said that money does not affect unemployment. The tables have now turned. Gani (2003) produced a model of indirect trade in which money is necessary as a means of payment....

The new method of system dynamics, Method of System Potential (MSP), is applied for examination of long-term and short-term dynamics of Economic System. According to MSP two ways of long-term development of a system exist: (1) cyclical and (2) noncyclical dynamics of efficiency index of a system...

The new method of system dynamics, Method of System Potential (MSP), is applied for examination of long-term and short-term dynamics of the Economic System. According to MSP two ways of long-term development of a system exist: (1) cyclical and (2) noncyclical dynamics of efficiency index of a...

The author argues that a policy of devaluation imposed on African economies in compliance with real exchange rate rules contradicts the inflation objectives of fiscal stabilisation because by devaluing a currency at every instance of inflation, it implies that the exchange rate is indexed to the...

An analytical innovation enhances microeconomics, enabling it to answer all questions of macroeconomics. It combines the production and consumption decisions of the individual in one model. For each individual, it identifies the customers of what he sells, and the suppliers of what he buys. It...

SINCE 1930, EXPECTATIONS HAVE PLAYED AN IMPORTANT ROLE IN ECONOMIC THEORY AND THIS IS BECAUSE ECONOMICS IS GENERALLY CONCERNED WITH THE IMPLICATIONS OF CURRENT ACTIONS FOR THE FUTURE. THIS PAPER THEREFORE ARGUES THAT THE DEVELOPMENT OF RATIONAL EXPECTATIONS THEORY WILL MAKE A MORE SIGNIFICANT...

The paper explores the impacts of heterogeneity in degree of relative risk aversion on the balance on current account in a two-country endogenous growth model. It concludes that, like the heterogeneity of demographic changes, the heterogeneity in degree of relative risk aversion generates...

The paper explores an endogenous growth model in which scale effects asymptotically vanish and an economy grows without population growth. The key mechanism behind these features is substitution between investing in capital and in knowledge when firms face growing uncompensated knowledge...