- Title Pages
- Title Pages
- List of Tables
- List of Figures
- Preface
- Acknowledgments
- Acknowledgments
- Introduction
- Glossary of Mathematical Symbols in Order of Appearance
-
Chapter One Expectations Before the Rational Expectations Revolution -
Chapter Two Rational Expectations Are Endogenous to and Abide by “the” Model -
Part Two Allais’s Theory of “Expectations” Under Uncertainty -
Chapter Three Macrofoundations of Monetary Dynamics -
Chapter Four Microfoundations of Monetary Dynamics -
Chapter Five The Fundamental Equation of Monetary Dynamics -
Chapter Six Joint Testing of the HRL Formulation of the Demand for Money and of the Fundamental Equation of Monetary Dynamics -
Chapter Seven Allais’s HRL Formulation -
Chapter Eight The HRL Formulation and Nominal Interest Rates -
Chapter Nine Perceived Returns and the Modeling of Financial Behavior -
Chapter Ten Downside Potential Under Risk -
Chapter Eleven Downside Potential Under Uncertainty -
Chapter Twelve Conclusion -
Appendix A How to Compute Zn and zn -
Appendix B Nominal Interest Rates and the Perceived Rate of Nominal Growth -
Appendix C Proofs -
Appendix D Comparison Between the Kalman Filter and Allais’s HRL Algorithm -
Appendix E A Note on the Theory of Intertemporal Choice -
Appendix F Allais’s Cardinal Utility Function - Bibliography
- Index
Macrofoundations of Monetary Dynamics
Macrofoundations of Monetary Dynamics
- Chapter:
- (p.47) Chapter Three Macrofoundations of Monetary Dynamics
- Source:
- Uncertainty, Expectations, and Financial Instability
- Author(s):
Eric Barthalon
- Publisher:
- Columbia University Press
This chapter examines the macrofoundations of Maurice Allais's theory of monetary dynamics. In particular, it considers Allais's theoretical contributions with respect to the establishment—through the aggregation of the cash flow statements of individual businesses—of the accounting identities linking nominal macroeconomic variables, including transactions on securities, bank credit, and money. It also discusses Allais's role in the endogenous generation of cyclical fluctuations in aggregate nominal spending by a stylized model in which the driving factor is the gap between the supply of and the demand for money, both of which are nonlinear, bounded, but analytically not specified functions: the former increases and the latter decreases in relation to nominal growth.
Keywords: monetary dynamics, Maurice Allais, cash flow, accounting identities, macroeconomic variables, securities, bank credit, money, cyclical fluctuations, nominal spending
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- Title Pages
- Title Pages
- List of Tables
- List of Figures
- Preface
- Acknowledgments
- Acknowledgments
- Introduction
- Glossary of Mathematical Symbols in Order of Appearance
-
Chapter One Expectations Before the Rational Expectations Revolution -
Chapter Two Rational Expectations Are Endogenous to and Abide by “the” Model -
Part Two Allais’s Theory of “Expectations” Under Uncertainty -
Chapter Three Macrofoundations of Monetary Dynamics -
Chapter Four Microfoundations of Monetary Dynamics -
Chapter Five The Fundamental Equation of Monetary Dynamics -
Chapter Six Joint Testing of the HRL Formulation of the Demand for Money and of the Fundamental Equation of Monetary Dynamics -
Chapter Seven Allais’s HRL Formulation -
Chapter Eight The HRL Formulation and Nominal Interest Rates -
Chapter Nine Perceived Returns and the Modeling of Financial Behavior -
Chapter Ten Downside Potential Under Risk -
Chapter Eleven Downside Potential Under Uncertainty -
Chapter Twelve Conclusion -
Appendix A How to Compute Zn and zn -
Appendix B Nominal Interest Rates and the Perceived Rate of Nominal Growth -
Appendix C Proofs -
Appendix D Comparison Between the Kalman Filter and Allais’s HRL Algorithm -
Appendix E A Note on the Theory of Intertemporal Choice -
Appendix F Allais’s Cardinal Utility Function - Bibliography
- Index
