Abstract
The short-run equilibrium can be condensed to a system of two differential equations:
This poses the question whether the long-run equilibrium will be stable or not. By adopting phase-diagram techniques, we shall try to answer this question. First of all, the short-run equilibrium can be ascertained by cutting the IS and LM curves, see (1) and (3) in section 3:
From this follows the equilibrium income in per capita terms y.
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© 1992 Physica-Verlag Heidelberg
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Carlberg, M. (1992). Stability. In: Monetary and Fiscal Dynamics. Studies in Contemporary Economics. Physica-Verlag HD. https://doi.org/10.1007/978-3-642-47689-1_30
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DOI: https://doi.org/10.1007/978-3-642-47689-1_30
Publisher Name: Physica-Verlag HD
Print ISBN: 978-3-7908-0619-9
Online ISBN: 978-3-642-47689-1
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