Chaiechi, Taha (2009) Empirical analysis of a post-Keynesian macroeconomic model of financial development. In: Proceedings of the 11th Path to Full Employment / 16th National Unemployment Conference. From: 11th Path to Full Employment / 16th National Unemployment Conference, 3-4 December 2009, Newcastle, NSW, Australia.

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Abstract

In recent studies the importance of financial markets has been highlighted and financial systems have been ascribed an increasing influence over real sector development. However, most of these discussions fail to adequately integrate this relationship into a general macro economic model. The argument put forward by Endogenous Growth theorists is mainly that an intermediation sector permits an economy to reduce the fraction of its savings held in the form of unproductive liquid assets; therefore financial intermediaries may naturally tend to alter the composition of investment and savings in a way that is favourable to capital accumulation and economic growth.

On the other hand Post-Keynesian growth theories that have been formed from various strands found mainly in the writings of Keynes and Kalecki and stimulated by Harrod's approach which places more emphasis on income distribution, have tended to neglect the role of financial market development. The resulting macroeconomic models concentrate on the real side of the economy and pay little attention to the financial sector. This motivates the modelling strategy pursued in this paper along with some assumptions derived from the theory of financial intermediation for further investigation of the mainstream Keynesian/Post-Keynesian framework.

Item ID:	11228
Item Type:	Conference Item (Research - E1)
ISBN:	978-0-9806034-6-0
Keywords:	post Keynesian growth models; financial development; structural VAR modelling
Related URLs:	http://e1.newcastle.edu.au/coffee/
Date Deposited:	27 May 2010 03:24
FoR Codes:	14 ECONOMICS > 1403 Econometrics > 140305 Time-Series Analysis @ 50% 14 ECONOMICS > 1401 Economic Theory > 140102 Macroeconomic Theory @ 50%
SEO Codes:	91 ECONOMIC FRAMEWORK > 9101 Macroeconomics > 910103 Economic Growth @ 33% 91 ECONOMIC FRAMEWORK > 9101 Macroeconomics > 910101 Balance of Payments @ 33% 91 ECONOMIC FRAMEWORK > 9101 Macroeconomics > 910109 Savings and Investments @ 34%
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