Abstract
The model considers stock-flow behaviour in an open economy in which both price and quantity adjustments take place. Stocks are introduced with reference to the real sector (where adjustments of fixed capital and inventories to their respective desired levels are present) and to the financial sector which includes the stock of money, the stock of commercial credit, the stock of net foreign assets and the stock of international reserves. Real and financial feedbacks are, therefore, largely considered in the model. Government expenditure and revenues (taxation) are also present so that the effects of endogenous public deficits are included.
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© 1984 Springer-Verlag Berlin Heidelberg
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Gandolfo, G., Padoan, P.C. (1984). The Model. In: A Disequilibnum Model of Real and Financial Accumulation in an Open Economy. Lecture Notes in Economics and Mathematical Systems, vol 236. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-95459-7_2
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DOI: https://doi.org/10.1007/978-3-642-95459-7_2
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-13889-1
Online ISBN: 978-3-642-95459-7
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