ABSTRACT

This chapter explores the dynamical system established in the preceding chapter from the numerical perspectives. The hierarchical manner by starting from an eight-dimensional core version of the model which concentrates on its real dynamics. It enlarges the core version step by step towards the inclusion of financial markets, the addition of credit rationing, the integration of wealth effects and finally the consideration of economic policy. At each stage some numerical simulations are provided which show that this advanced type of Keynesian macrosystem generates viable, but in general not at all convergent, dynamics. Economic policy needs therefore to be designed in view of the endogenous growth fluctuations which are the result of the many feedback channels that this type of model brings into interaction. These individual feedback channels can be made stronger or weaker, relative to each other.