Keynesian Dynamics and the Wage-Price Spiral:Estimating a Baseline Disequilibrium Approach

We reformulate the baseline disequilibrium AS-AD model of Asada et al. (2004) to make it applicable for empirical estimation. The model now exhibits a Taylor interest rate rule in the place of an LM curve, a dynamic IS curve and dynamic employment adjustment. It is based on sticky wages and prices, perfect foresight of current inflation rates and adaptive expectations concerning the inflation climate in which the economy is operating. The implied nonlinear 5D model of real markets disequilibrium dynamics avoids anomalies of the Neoclassical synthesis (Stage I). It exhibits Keynesian feedback structures with asymptotic stability of its steady state for low adjustment speeds and with cyclical loss of stability when adjustment speeds are made sufficiently large. In the second part we estimated the equations of the model to study its stability features from the empirical point of view with respect to the feedback chains it exhibits. Based on these estimates we also study to which extent a Blanchard and Katz error correction mechanism, more pronounced interest rate feedback rules or downward wage rigidity can stabilize the dynamics in the large when the steady state is locally repelling. The achievements of this baseline disequilibrium AS-AD model and its Keynesian feedback channels can be usefully contrasted with those of the microfounded, but in scope more limited now fashionable New Keynesian alternative (the Neoclassical Synthesiso, Stage IIDAS-AD growth, wage and price Phillips curves,adverse real wage adjustment, (in)stability, persistent business cycles

Keynesian Dynamics and the Wage-Price Spiral:Estimating and Analyzing a Baseline Disequilibrium Approach

In this paper, we reformulate the theoretical baseline DAS-AD model of Asada, Chen, Chiarella and Flaschel (2004) to allow for its somewhat simplified empirical estimation. The model now exhibits a Taylor interest rate rule in the place of an LM curve and a dynamic IS curve and dynamic employment adjustment. It is based on sticky wages and prices, perfect foresight of current inflation rates and adaptive expectations concerning the inflation climate in which the economy is operating. The implied nonlinear 6D model of real markets disequilibrium dynamics avoids striking anomalies of the old Neoclassical synthesis and can be usefully compared with the model of the new Neoclassical Synthesis when the latter is based on both staggered prices and wages. It exhibits typical Keynesian feedback structures with asymptotic stability of its steady state for low adjustment speeds and with cyclical loss of stability -- by way of Hopf bifurcations -- when certain adjustment speeds are made sufficiently large. In the second part we provide system estimates of the equations of the model in order to study its stability features based on empirical parameter estimates with respect to its various feedback channels. Based on these estimates we find that the dynamics is strongly convergent around the steady state, but will loose this feature if the inflationary climate variable adjusts sufficiently fast. We also study to which extent more active interest rate feedback rules or downward wage rigidity can stabilize the dynamics in the large when the steady state is made locally repelling by a faster adjustment of inflationary expectations. We find support for the orthodox view that (somewhat restricted) money wage flexibility is the most important stabilizer in this framework, while monetary policy should allow for sufficient steady state inflation in order to avoid stability problems in areas of the phase space where wages are still not very flexible in a downward directionDAS-DAD growth, wage and price Phillips curves, nonlinear estimation, stability, economic breakdown, persistent cycles, monetary policy.

The acceleration of metastases after tumor removal and the paradoxical phenomenon of concomitant tumor resistance

Although surgical extirpation of tumors is usually clinically recommended, tumor removal may entail an undesired side effect: the risk of accelerating the growth of metastases. This effect may account for the relatively modest survival benefits observed when surgery is accomplished after tumor cells have already disseminated to distant anatomical sites even when tumor removal is combined with chemotherapy or immunotherapy. Although different mechanisms could contribute to the enhancement of residual tumor growth after tumor removal, probably a main effect is associated with the withdrawing of an inhibitory effect generated, by certain circumstances, by the primary tumor on its own metastases. This inhibitory effect is a particular case of a more general and paradoxical phenomenon known as concomitant tumor resistance (CR) in which a tumor-bearing host inhibits or retards the growth of secondary tumor implants despite the fact that the primary tumor grows progressively. In this essay we especially focus on the last investigations of our laboratory concerningthe importance of tyrosine isomers as mediators of the phenomenon of CR and on their capacity to inhibit established metastases. Taking into account that metastases are considered the main problem in cancer pathology, our investigations aimed to elucidate the molecular basis of the phenomenon of CR might stimulate the design of new and less harmful means of managing malignant diseases, especially by controlling the growth of metastases after the removal of a primary tumor, or after other injuries or stressors that have been claimed to promote the escape of metastases from dormancy.Fil: Montagna, Daniela Romina. Consejo Nacional de Investigaciones Científicas y Técnicas. Instituto de Medicina Experimental. Academia Nacional de Medicina de Buenos Aires. Instituto de Medicina Experimental; ArgentinaFil: Chiarella, Paula. Consejo Nacional de Investigaciones Científicas y Técnicas. Instituto de Medicina Experimental. Academia Nacional de Medicina de Buenos Aires. Instituto de Medicina Experimental; ArgentinaFil: Meiss, Roberto P.. Academia Nacional de Medicina de Buenos Aires; ArgentinaFil: Ruggiero, Raul Alejandro. Consejo Nacional de Investigaciones Científicas y Técnicas. Instituto de Medicina Experimental. Academia Nacional de Medicina de Buenos Aires. Instituto de Medicina Experimental; Argentin

A Dynamic Analysis of the Microstructure of Moving Average Rules in a Double Auction Market

Inspired by the theoretically oriented dynamic analysis of moving average rules in Chiarella, He and Hommes (CHH) (2006a) model, this paper conducts a dynamic analysis of a microstructure model of continuous double auctions in which the probability of heterogeneous agents to trade is determined by the rules of either fundamentalists mean-reverting to the fundamental or chartists choosing moving average rules based their relative performance. With such a realistic market microstructure, the model is able not only to obtain the results of the CHH model but also to characterise most of the stylized facts including the power-law behaviour of volatility. The results seem to suggest that a comprehensive explanation of several statistical properties of returns is possible in a framework where both behavioral traits and realistic microstructure have a role

Interacting Business Cycle Fluctuations: A Two-Country Model

In this paper, we develop a model of business cycle fluctuations between two interacting open economies within the disequilibrium or non-market clearing paradigm. We analyze the main feedback mechanisms (Keynes, Mundell, Rose and Dornbusch) driving the dynamics and the conflict between their stabilizing and destabilizing tendencies and how these depend on certain key speeds of adjustment in the real and foreign exchange sectors. We explore numerically a variety of situations of interacting price cycles in the two countries, where the steady state is locally repelling, but where the overall dynamics are bounded in an economically meaningful domain by assuming downward money wage rigidity

An analysis of the cobweb model with boundedly rational heterogeneous producers

This paper considers the traditional cobweb model with heterogenous risk averse producers whose supply functions involve their estimates of the conditional mean and variance of the future price. The producers seek to learn these quantities by applying geometric decay processes (GDP) to past prices. The heterogeneity manifests itself in the lag lengths and memory parameters applied to past prices as well as in risk aversion coefficients. We find that each dimension of heterogeneity changes/enriches the cobweb dynamics with respect to the case of homogeneous producers. © 2006 Elsevier B.V. All rights reserved

Stock market, interest rate and output: a model and estimation for US time series data

Stock market, interest rate and output: a model and estimation for US time series dat

Quantum phase slips in superconducting Nb nanowire networks deposited on self-assembled Si templates

Robust porous silicon substrates were employed for generating interconnected networks of superconducting ultrathin Nb nanowires. Scanning electron microscopy analysis was performed to investigate the morphology of the samples, which constitute of polycrystalline single wires with grain size of about 10 nm. The samples exhibit nonzero resistance over a broad temperature range below the critical temperature, fingerprint of phase slippage processes. The transport data are satisfactory reproduced by models describing both thermal and quantum fluctuations of the superconducting order parameter in thin homogeneous superconducting wires.Comment: accepted for publication on Applied Physics Letter

Modeling house price dynamics with heterogeneous speculators

This paper investigates the impact of speculative behavior on house price dynamics. Speculative demand for housing is modeled using a heterogeneous agent approach, whereas ‘real’ demand and housing supply are represented in a standard way. Together, real and speculative forces determine excess demand in each period and house price adjustments. Three alternative models are proposed, capturing in different ways the interplay between fundamental trading rules and extrapolative trading rules, resulting in a 2D, a 3D, and a 4D nonlinear discretetime dynamical system, respectively. While the destabilizing effect of speculative behavior on the model’s steady state is proven in general, the three specific cases illustrate a variety of situations that can bring about endogenous dynamics, with lasting and significant price swings around the ‘fundamental ’ price, as we have seen in many real markets

Quantum Field Theory of Forward Rates with Stochastic Volatility

In a recent formulation of a quantum field theory of forward rates, the volatility of the forward rates was taken to be deterministic. The field theory of the forward rates is generalized to the case of stochastic volatility. Two cases are analyzed, firstly when volatility is taken to be a function of the forward rates, and secondly when volatility is taken to be an independent quantum field. Since volatiltiy is a positive valued quantum field, the full theory turns out to be an interacting nonlinear quantum field theory in two dimensions. The state space and Hamiltonian for the interacting theory are obtained, and shown to have a nontrivial structure due to the manifold moving with a constant velocity. The no arbitrage condition is reformulated in terms of the Hamiltonian of the system, and then exactly solved for the nonlinear interacting case.Comment: 7 Figure