Deflation research paper

I have been work­ing recently on an extended ver­sion of the Good­win model using meth­ods sim­i­lar to your own. Refer­ring to your paper from 1995 on your mod­i­fied Good­win model (–617), where invest­ment is a func­tion of profit rate, and there is no House­hold sav­ings (all worker income goes to con­sump­tion), I have the fol­low­ing com­ment:
Unless I have mis­un­der­stood some­thing, it would seem that your model vio­lates the sec­tor bal­ance equa­tion, which is in this case:
Y-WL-rD –I (pro­duc­tion sec­tor sur­plus)+ 0 (House­hold sec­tor sur­plus) + rD (Bank sec­tor sur­plus) =0.

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Deflation research paper

deflation research paper

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