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Endogenous Business Cycles and Hysteresis : A Post-Keynesian, Agent-Based Approach

Abstract : The neoclassical theory developed historically around the concept of equilibrium (partial or general), by assuming its long run stability and independence from monetary and real fluctuations. The growing emphasis on path-dependence and, particularly, on the concept of hysteresis calls into question the traditional method, by rejecting the theoretical validity of the neoclassical equilibrium and its related properties of stability. This thesis focuses on the model of “genuine” hysteresis, which first developed in the field of physics and recently extended its application to economic phenomena. Far from suggesting an appropriation of the methods that are typical of “hard” sciences, the aim is to analyse the consequences of discontinuous and hysteretic investment decisions on business cycles and long run trajectories. By relying on the Post Keynesian theory of growth and distribution, and the multi-agent methodological approach, this thesis develops a macroeconomic theoretical model that is able to generate non-linear business cycles around transitory equilibria, which are fully endogenous and historically determined according to the specific adjustment path. This theoretical framework confirms and reinforces the traditional Post Keynesian implications of income inequalities on the degree of utilization of productive capacity and on long run growth. Moreover, expansionary demand policies regain a central role in driving the economy towards the full employment of productive resources.
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Federico Bassi. Endogenous Business Cycles and Hysteresis : A Post-Keynesian, Agent-Based Approach. Economics and Finance. Université Sorbonne Paris Cité; Université La Sapienza de Rome (Italie), 2016. English. ⟨NNT : 2016USPCD045⟩. ⟨tel-02099724⟩

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