Skip to search
Skip to main content
Title starts with
Author (sorted by title)
Call number (browse)
Princeton University Library Catalog
Beautiful Cycles : A Theory and a Model Implying a Curious Role for Interest / Marco Gross.
Washington, D.C. : International Monetary Fund, 2021.
1 online resource (37 pages)
IMF Working Papers; Working Paper ; No. 2021/067
[More in this series]
IMF Working Papers
Where do economic cycles come from? This paper contemplates an utmost minimalistic model and underlying theory that rest on two assumptions for letting them emerge endogenously: (1) the presence of interest-bearing debt; and (2) a degree of downward nominal wage rigidity. Despite its parsimony, the model generates well-behaved, self-evolving limit cycles and replicates six essential empirical facts: (1) booms are long- while recessions short-lived; (2) leverage is procyclical; (3) firm profit and wage shares in GDP are counter- and procyclical, respectively; (4) Phillips curves are downward-sloping and convex, and Okun's law relation is replicated; (5) default cascades arise endogenously at the turning points to recessions; (6) lending spreads are countercyclical. One can refer to the model as being of a Dynamic Stochastic General Disequilibrium (DSGD) kind.
Source of description
Description based on print version record.
Statement on language in description
Princeton University Library aims to describe library materials in a manner that is respectful to the individuals and communities who create, use, and are represented in the collections we manage.
Ask a Question
Suggest a Correction
Report Harmful Language
Beautiful Cycles : A Theory and a Model Implying a Curious Role for Interest