In this paper we present a fixprice model in which private and public consumption show some degree of substitution. We offer formulae for the Keynesian multiplier which depend on this degree of substitution. We also show that there is a Pigou effect and that, sometimes, this effect is larger...

It is now a few years since the introduction of the common currency, and Europe is still experiencing high unemployment. The conventional logic attributes this problem to strong trade unions and other flaws in the labour market. This article takes a different approach. Using a game theoretic...

In the literature of staggered wages (Taylor, 1979, 1980; Blanchard, 1986; Ball and Cecchetti, 1991) the discount factor is neglected in the workers’ loss function. Yet discounting is to be viewed as an extra piece of micro-foundation with implications for discretionary monetary policy. We revisit the...

The EMU assigns a very marginal role to economic policy and relies on the leading idea that, if prices are kept constant, there will be an automatic convergence towards long-run equilibrium income. These beliefs represent the theoretical underpinnings of fiscal and monetary policy strategies in...

This paper puts forward an extended model of cumulative growth in which the effects of education and catch-up are integrated, following the Kaldorian ideas of increasing returns of scale and endogenous technical progress. Based on recent theoretical developments, this model allows for examining...

The purpose of this article is to construct a Keynesian model which integrates the informal economy, based on a short-term analysis. From a structural system of 23 equations, we propose a simple modeling that allows for an assessment of the impact of illegal activities on the major macroeconomic...

We show the negative relation between the unemployment rate and the inflation rate, that is, the Phillips curve using an overlapping generations model under monopolistic competition. We consider the effects of exogeneous changes in labor productivity. An increase (decrease) in the labor...

When towards the end of 2008 the leading world economies found themselves in the grips of a severe global financial and economic crisis, their governments felt compelled to react. Most of them, especially in North America and Europe, did so by dramatic increases in government spending with two...

The paper attempts to verify Richard Goodwin's (1967) endogenous business cycle theory which states that the driving forces behind fluctuations are class struggles between capitalists and workers about income distribution. Based on a Marxian profit-led model, non-linear differential equations...

Incomes policy started with the San Valentine's decree of 1984, which marks the beginning of the process that led to the abolishment of Scala Mobile and reached its peak with the Protocollo d'intesa of 1993. The work proposes to study by cointegration analysis the effects of incomes policy on...