This is a second paper of a series of macroeconomic modeling that tries to model macroeconomic dynamics such as the determination of GDP (Gross Domestic Product) and money supply from system dynamics perspective. Following the first paper on the money supply and creation of deposits, this second paper tries to model dynamic determination processes of GDP, interest rate and price level on the same basis of the principle of accounting system dynamics developed by the author. For this purpose, a simple Keynesian multiplier model is constructed as a base model to examine a dynamic determination process of GDP. It is then expanded to incorporate the interest rate, whose introduction enables the analysis of aggregate demand equilibria as well as transactions of savings and deposits, and government debt and securities. Finally, a flexible price is introduced to adjust an interplay between aggregate demand equilibrium and full capacity output level. A somewhat surprise result of business cycle is observed from the analysis.

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Date created

• 2005 July 17-2005 July 21

Type

• Document

Processing Activity

• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

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• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
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ITEM CONTEXT

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cc5bb0ac12a5b68b26b1583548898dae

Scope and Contents

Part of

3c582e6f5cf305ef0030c7471b499022

Scope and Contents

Part of

23d738ba88f8333bc39725f9cb5bd0b8

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Collection

System Dynamic Society Records

Scope and Contents

Collecting area

• This collection is part of the University Archives