Serena Sordi

Some Notes on the Second Version of Kalecki’s Business-cycle Theory

The study of the forces determining the investment process has been one of the ‘leitmotifs’ of Kalecki’s work. There we can find a continuing attempt to improve the analysis of investment decisions —‘the central ‘piece de resistance’ of economics’ (Kalecki, 1968, p. 263).

Economic models and the relevance of “chaotic regions”:An application to Goodwin's growth cycle model

In this paper, we argue that Pohjolas one‐dimensional, discrete‐time version of Goodwinsgrowth cycle model is based on assumptions that conflict with the “symbiotic‐conflictual”spirit of the model. It is shown that when the assumption about the dynamical real wage ismodified, in contrast with Pohjolas opinion, the likelihood of chaotic solutions does notincrease. In particular, when a discrete‐time Phillips curve is considered, the model becomestwo‐dimensional, but admits chaotic solutions only for parameter values which are not withineconomically reasonable values.

Genesis and Foundations of the Multiplier: Marx, Kalecki and Keynes

This paper explores the Marxian genetic root of the multiplier in order to clarify its foundations and validity conditions. Though the analysis is restricted to the first two volumes of Capital and the early contributions by Kalecki in the 1930s, we argue that we can draw from these works valuable insights into the theoretical and empirical scope of the Kahn-Keynes multiplier.

A Disequilibrium Growth Cycle Model with Differential Savings

This paper extends Goodwin’s growth cycle model by assuming both differential savings propensities and disequilibrium in the goods market. It is shown that both modifications entail an increase in the dimensionality of the dynamical system of the model. By applying the existence part of the Hopf bifurcation theorem, the possibility of persistent and bounded cyclical paths for the resulting 4-dimensional dynamical system is then established. With the help of numerical simulation some evidence is finally given that the limit cycle emerging from the Hopf bifurcation is stable.

On controlling chaos in a discrete‐time Walrasian tâtonnement process

The simple pure exchange model with two individuals and two goods introduced by Day and Pianigiani in 1991, later extensively analyzed by Day and taken up again by Mukherji, is discussed and extended with the purpose of showing that chaos in a discrete tA¢tonnement process of this kind can be controlled if the auctioneer uses a smooth, non†linear formulation of the price evolution process such that the price adjustment is a sigmoid†shaped function of the excess demand, with given lower and upper limits. In particular, we show that, given the price adjustment speed and the excess demand function, the auctioneer can (a) stabilize the dynamics, (b) reduce the complexity of the attractor and (c) increase the economic significance of the adjustment process by simply acting on the lower and/or upper limits that constrain price dynamics.

Financial Fragility and Interacting Units: an Exercise

This paper assumes that financial fluctuations are the result of the dynamic interaction between liquidity and solvency conditions of individual financial units. The framework is designed as a heterogeneous agent model which proceeds through discrete time steps within a finite time horizon. The interaction at the microlevel between financial units and the market maker, who is in charge of clearing the market, produces interesting complex dynamics. The model is analyzed by means of numerical simulations and agent-based computational economics (ACE) approach. The behaviour and evolution of financial units are studied for different parameter regimes in order to show the importance of the parameter setting in the emergence of complex dynamics. Monetary policy implications for the banking sector are also discussed.