We theoretically analyze the interactions between asset prices, nancial speculation, and macroeconomic outcomes when output is determined by aggregate demand. If the interest rate is constrained, a rise in the risk premium lowers asset prices and generates a demand recession. This reduces...

This paper presents general approach to description of business cycles aggregate fluctuations of economic and financial variables. We model economics as ensemble of agents on economic space and agent's risk ratings play role of their coordinates. Aggregation of variables of agents with...

Hence the crises of great depression affected US economy. Keynes, Minsky, and Kalecki showed the economic approaching of speculative and practical solutionsthat have reviewed for the case of fluctuations. Following the trajectory ofgreat Depression we obtain the thesis for Keynes and Minsky,...

This paper presents business cycle model that is not based on assumptions of general equilibrium framework. We describe economic transactions between agents and assessment of agents risk as ground and tools for business cycle modeling. We treat agents risk ratings x as their coordinates x on...

This paper presents general approach to description of business cycles aggregate fluctuations of economic and financial variables. We model economics as ensemble of agents on economic space and agent's risk ratings play role of their coordinates. Aggregation of variables of agents with...

Medium-run macroeconomics refers to aggregate economic phenomena that manifest over periods of 10 to 25 years. This area of research has emerged over the last decade as a new and distinct field of enquiry. In this paper, I overview a set of personal attempts aimed at understanding certain...

We discover sentiment-driven equilibria in popular models of imperfect risk sharing. In these equilibria, sentiment dynamics behave like uncertainty shocks, in the sense that self-fulfilled beliefs about volatility drive aggregate fluctuations. Because such fluctuations can decouple from the...

We provide a continuous-time "risk-centric" representation of the New Keynesian model, which we use to analyze the interactions between asset prices, financial speculation, and macroeconomic outcomes when output is determined by aggregate demand. In principle, interest rate policy is highly...

Serial correlation in macroeconomics is pervasive. Macroeconomic modellers find it impossible to model this feature without relying on serially correlated shocks. Using a behavioral macroeconomic model, I show that serial correlation in inflation and output can easily be explained in the context...

In this paper a two-sector growth model allowing indeterminacy to occur at relatively mild degrees of increasing returns is developed. It is shown that these economies of scale need only be present in one sector of the economy (investment). This feature of the model, therefore, builds on...