Model Of The Monetary Measure Of Economic Growth And Economic Fluctuations

The Neo-classic general school Transformation the Keynes Economics to so call "macroeconomics".In this Transformation,monetary Factors disappear from the analysis target,all analysis targets are physical variables,and the concept of "Effective demand" has no effect.The theory about the monetary business cycle also base on the prices Stickiness,do not reflect the demand effect on business cycle. Further more,these models of the aggregate production function can not escape the critical of "Cambridge capital debate".On the other hand,the New-Cambridge Economics and the Post-Keynesian Economics theory about economic growth and business cycle is not completive.So,this paper tries to analyze economic growth and business cycle using a model which base on monetary variables.This model start from the Cambridge growth formula and the multiplier theory, through assuming the distribution and the save rate is exogenous variables to get the law about the profit rate decided by investment.Then,using the assumption about invest and loan,we establish a model base on monetary variables.We discuss the effect of invest and loan to growth.The conclusion is that,in an economy which demand play decisive role,invest and income have several balanced growth rate, some is "blade growth",and others is stable.The Improve of consume rate and the capital income share will improve the stable balanced growth rate,the decline of interest rate have the same effect.Which growth rate the economy will trend is decided by the effective demand recently,and the change of capital price and government invest may change this choice.Through add a random variable to the invest function,we analysis the business cycle of the basic model caused by exogenous shock.The random variable means the effective factors to investment out of the profit rate.The conclusion is that,on the shock,the growth rate of invest and income will deviation from the original path gradually,they will retune gradually.The business cycle caused by exogenous shock is temporary.Further more,the save rate and labor income share are higher,the effect of shock is shorter.Then,we modify the model through a special invest function,base on this kind of modify,we analysis the raw of macro variables decided by the special relationship between invest and profits.The conclusion is that,due to the special relationship between invest and profits,the growth rate of invest and income will fluctuate around a stable growth rate.And,the consume rate and the capital income share are higher, the fluctuation is less frequent.Interest rate has the opposite influence.Do these changes of monetary variable main reflect the change of price level or physical factors? As a special case,we analysis this problem in a dual economy model.In this model,the physical factor is "employment"——the speed of inter-sector reallocation of labor.Through assume the two sectors have different pricing mechanics,this model analyze the special mechanics from the change of growth rate of monetary variable to the change of prices level,and the speed of inter-sector reallocation of labor in this course.The result is,higher money supply growth and monetary aggregate variable growth can increase the growth rate of total wages,which will increase the price of Agricultural product and the speed of Inter-sector Reallocation of Labor,or it can increase the pricing proportion of manufacture product,which will increase all prices but have no effect on physical factors.So,the answer of above question depends on the distribution change.The frame of this paper is that:the first chapter is introduction,which descript the starting point of this paper and the features of our models;the second chapter is the literature review,which comment the debate about economic growth and monetary business cycle;the third chapter establish the basic model to analysis the balanced growth rates;the fourth chapter discuss the balanced growth rates;the fifth chapter discuss the business cycle cause by exogenous shock;the sixth chapter discuss the endogenous business cycle cause by special relationship between invest and profits;the seventh chapter discuss the price level under different growth rates in a dual economy model;the next two chapters give simple experience research about the above models;the last chapters is the summary.