International Journal of Economic Behavior and Organization
Volume 3, Issue 2-1, April 2015, Pages: 73-76
Received: Apr. 2, 2015;
Accepted: Apr. 10, 2015;
Published: Apr. 17, 2015
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Hiroyuki Yoshida, College of Economics, Nihon University, Tokyo, Japan
Friedman (1968) proposes a constant money growth rate rule to establish the stability of the market economy. We examine whether his suggestion is reasonable or not. We seek to develop the Vanderkamp (1975) model, which captures the essential points of monetarism: the quantity theory of money and the natural rate of unemployment. Our main finding is that the economy experiences chaotic fluctuations around the steady state when the adjustment speed of inflationary expectations is sufficiently slow.
A Monetarist Model Reconsidered: The Emergence of Chaotic Fluctuations, International Journal of Economic Behavior and Organization. Special Issue: Recent Developments of Economic Theory and Its Applications.
Vol. 3, No. 2-1,
2015, pp. 73-76.
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