Period Models, Continuous Time and Applied Macrodynamics	20
	Introduction	20
	The J2-Status of Macrodynamic Period Analysis	21
	1D Equivalence: The Solow Model	28
	2D Monetarist Baseline Analysis. Chaotic Attractors?	34
	4D Complex Keynesian Macrodynamics	40
	Concluding Remarks	44
	Appendix A: Indeterminacy for Large Periods h	44
	References	50
	Part I The Closed Economy	52
	The AS--AD Framework: Origins, Problems and Progress	53
	Introduction	53
	Traditional AS--AD with Myopic Perfect Foresight. Classical Solutions in a Keynesian Setup?	57
	New Keynesian AS--AD Dynamics with Staggered Wage and Price Setting	62
	Matured Keynesian AD--AS Analysis: A Baseline Model	68
	Feedback-Guided Local Stability Investigation	77
	Wage Share Error Corrections and Interest Rate Policy Rules	82
	Downward Nominal Wage Rigidities	86
	Conclusion	92
	Appendix A: Rigorous Stability Analysis (Interest Rate Policy Case)	92
	References	105
	Wage--Price Dynamics: Basic Structural Form, Estimation and Analysis	108
	Introduction	108
	The Phillips Curve(s)	108
	Basic Macro Feedback Chains. A Reconsideration	110
	Outline of the Chapter	115
	A Model of the Wage--Price Spiral	116
	The Wage--Price Spiral	116
	Technology	118
	Aggregate Goods Demand	119
	The Laws of Motion	120
	The Effective Demand Function	122
	Stability Issues	123
	Estimating the U.S. Wage--Price Spiral	126
	Data	127
	The Money-Wage Phillips Curve	128
	The Price Phillips Curve	131
	System Results	133
	Are There Adverse Rose Effects?	134
	Wage Flexibility, Instability and an Extended Interest Rate Rule	136
	Instability Due to an Unmatched Rose Effect	136
	Stability from Blanchard--Katz Type ``Error Correction''	137
	Stability from an Augmented Taylor Rule	138
	Conclusions	139
	Appendix A	139
	The Sectoral Budget Equations of the Model	108
	Wage Dynamics: Theoretical Foundation	110
	Price Dynamics: Theoretical Foundation	115
	Routh--Hurwitz Stability Conditions and Hopf Bifurcations	145
	Proofs of Propositions 3.2--3.7	146
	References	150
	Estimation and Analysis of an Extended AD--AS Model	154
	Introduction	154
	Structural Models of the Wage--Price Spiral	157
	New Keynesian Phillips Curves and the Wage--Price Spiral: A Brief Comparison	162
	Real-Wage Dynamics: The Critical Stability Condition	168
	Estimating the Wage--Price Spiral for the U.S. Economy	170
	Data Description	171
	Estimation Results	174
	Keynesian Macrodynamics: Empirical Reformulation of a Baseline Model	178
	5D Feedback-Guided Stability Analysis	186
	Estimating the Model	192
	Data Description	195
	Estimation of the Unrestricted VAR	196
	Estimation of the Structural Model	198
	Stability Analysis of the Estimated Model	204
	Instability, Global Boundedness and Monetary Policy	213
	Conclusions and Outlook	223
	References	226
	Linking Goods with Labor Markets: Okun's Law and Beyond	230
	Introduction	230
	Foundations for Regressions with Time-Varying Coefficients	233
	The Random Walk Approach	234
	Deterministic Spline Functions of the Coefficients	239
	A Comparison of the Stochastic and Deterministic Approach	241
	Okun's Law and the Natural Rate of Unemployment	246
	The Problem of Detrending	247
	Deriving the Natural Rate of Unemployment from the Data	255
	Okun's Law as a Time-Varying Statistical Regularity	261
	Different Specifications of the Relationship	261
	Time Variations in the Okun Coefficient	263
	Comovements of the Components of Output and Employment	270
	A Model of a Simple Recruitment Policy of Firms	276
	Gradual Adjustments of Hours and Employment	279
	Theoretical Framework	279
	Estimation	286
	Conclusion	296
	References	298
	Part II The Open Economy	301
	Exchange Rate and Stock Market Dynamics in a Two-Country Model	302
	Introduction	302
	The Dornbusch Exchange-Rate Dynamics	305
	Symmetric Two-Country Exchange Rate Dynamics	307
	The Blanchard Stock-Market Dynamics	318
	Interacting Blanchard Stock Market and Dornbusch Exchange Rate Dynamics: A Two-Country Framework	320
	A Model-Oriented Reformulation of the Taylor Interest Rate Rule	322
	Symmetric Countries: Stability Analysis	325
	The Average Economy	325
	The Difference Economy	326
	Summary	327
	Dornbusch Inflation Dynamics	327
	Outlook: Imperfect Capital Markets	330
	References	333
	Macroeconomic Imbalances and Inflation Dynamics in a Mundell-Fleming-Tobin Framework	335
	Introduction	335
	The General Framework	337
	Budget Equations and Saving/Financing Decisions	338
	Real Disposable Income and Wealth Expressions	339
	Temporary Equilibrium: Output, Interest and Exchange Rate Determination	341
	Dynamics and the Steady State of the Economy	344
	Local Stability Analysis	348
	Real Twin Deficit Accumulation and Inflation Dynamics	349
	Capital Account and Inflation Dynamics under Interest and Currency Pegs	352
	Assumptions	352
	The Model	353
	Steady State Determination	354
	Stability Analysis	355
	Twin Deficit or Surplus Accumulation	359
	Overshooting Exchange Rates and Inflation Dynamics for Perfectly Flexible Exchange Rate Regimes	359
	Equilibrium Conditions	360
	Dynamics and Steady State Determination	361
	Dornbusch (1976) Exchange Rate Dynamics	363
	Capital Account and Budget Deficit Dynamics	366
	International Capital Flows in the MFT Model	367
	Budget Restrictions	367
	Real Disposable Income and Wealth Accounting	369
	The Four Laws of Motion of the MFT Open Economy with International Capital Flows	371
	International Financial Dynamics: Some Basic Results	377
	Inflation Dynamics and International Capital Flows under Interest and Exchange Rate Pegs	377
	The Case of Flexible Exchange Rates	381
	Conclusions	383
	References	385
	Currency Crises, Credit Rationing and Monetary Policy in Emerging Markets	386
	Introduction	386
	The General Framework	387
	The Goods Markets	388
	The Financial Markets	393
	Dynamics under Fixed Prices and Flexible Exchange Rates	395
	Local Stability Analysis	395
	The Baseline Currency Crisis Scenario	397
	Dynamics under Gradually Adjusting Prices in Fixed Currency Regimes	398
	Local Stability Analysis	401
	Dynamics with a Standard Phillips-Curve	403
	Dynamics with a ``Kinked'' Phillips Curve	407
	Dynamics under Gradually Adjusting Nominal Exchange Rates and Prices	408
	The Case of Total Liability Dollarization =1	410
	The Case of Partial Liability Dollarization 0<<1	413
	Short Term Policy Responses and Medium Term Consequences: The Rules vs. Discretion Debate	416
	Econometric Analysis	419
	Concluding Remarks	424
	References	426
	Keynesian Dynamics and International Linkages in a Two-Country Model	429
	Introduction	429
	The Baseline Open-Economy Framework	430
	The Goods and Labor Markets	431
	The Wage-Price Dynamics	432
	Monetary Policy	436
	The Nominal Exchange Rate Dynamics	437
	Local Stability Analysis: The Small-Open Economy Case	440
	The Two-Country Framework: Estimation and Evaluation	444
	Stylized Facts of Monetary Policy	447
	Data Sources and Descriptive Statistics	448
	Structural Estimation Results	451
	Dynamic Adjustments	455
	Eigen-Value-based Stability Analysis	457
	Concluding Remarks	461
	References	463
	Outlook: Supply Constraints in Demand-Driven Macromodels	467
	Introduction	467
	A Non-Walrasian Model of Monetary Growth	470
	From Non-Walrasian to Keynesian Modeling of Monetary Growth	476
	Regime Switching in KMG Growth	482
	Supply Bottlenecks with Positive Inventories	483
	Exhausted Inventories and Excessive Aggregate Demand	497
	Numerical Analysis	503
	Summary	510
	References	512
	Mathematical Appendix: Some Useful Theorems	512
	References	522