In this paper we develop a simple dynamic New Keynesian type model using the multiplier – accelerator principle in our effort to determine the time paths of income, actual and expected inflation towards their long – run equilibrium values. Assuming that expectations are adaptive, we...

A multiplier/accelerator macroeconomic model incorporating the permanent income hypothesis in private consumption, financial constraints in private investment, and a government that attempts fiscal expansions with tight money, is examined. Stability conditions show that government actions could...

In this paper we adopt the analysis of Karpetis C. & Varelas E. (2005), in the context of which the time paths of real income, actual and expected infl ation are determined. Considering the model’s parameters values and initial conditions known a priori, we determine both the amplitude of...