International Journal of Economics and Business Administration
Articles Information
International Journal of Economics and Business Administration, Vol.5, No.2, Jun. 2019, Pub. Date: Apr. 10, 2019
A Kind of Neither Keynesian Nor Neoclassical Model (8): Equilibrium Between Fictitious and Substantial Economy
Pages: 55-67 Views: 496 Downloads: 386
Authors
[01] Mingan Zhan, Business School, Yunnan University, Kunming, China.
[02] Zhan Zhan, Faculty of Economics and Business, KU Leuven, Leuven, Belgium.
Abstract
The fictitious economy and the substantial economy are two unique forms in the macro economy. The balance between the two determines reasonable macro interest rates, normal inflation rates, potential output growth rates, and minimum unemployment rates. Countercyclical monetary policy has also changed the operating state of the economy system while restraining the cyclical fluctuations of the macro economy. In order to get these conclusions, this paper first defines the measurement methods of fictitious economy and substantial economy and their relations in economic operation, then analyses the economic significance of the balance between them and the causes of imbalance, and finally predicts and verifies the changing rules of various macro variables in these two forms. The greatest feature of this paper is that all inferences are verified by statistical data.
Keywords
Cobb-Douglas Function, Fictitious Earning Ratio, Substantial Earning Ratio, Average Earning Ratio, Marginal Earning Ratio
References
[01] Dornbusch R. and Fischer S. (1994) Macroeconomics. 6th Edition, New York: McGraw-Hill Book Co.
[02] Zhan, Z and Zhan, M. A. (2017b) A Kind of Neither Keynesian Nor Neoclassical Model (5): The Path of Economic Growth. Open Access Library Journal, 4, e3525.
[03] Zhan, Z and Zhan, M. A. (2018) A Kind of Neither Keynesian Nor Neoclassical Model (7): The Cause of the Financial Crisis. Open Access Library Journal, 5, e5084.
[04] Zhan, M. A. and Zhan, Z. (2016b) A Kind of Neither Keynesian Nor Neoclassical Model (2): The Business Cycle. Open Access Library Journal, 3, e3215.
[05] Zhan, M. A. and Zhan, Z. (2016a) A Kind of Neither Keynesian Nor Neoclassical Model (1): The Fundamental Equation. Open Access Library Journal, 3, e3207.
[06] Zhan, M. A. and Zhan, Z. (2017b) A Kind of Neither Keynesian Nor Neoclassical Model (6): The ending state of economic growth. Open Access Library Journal, 4, e3589.
[07] Keynes, J. M. (1936): The General Theory of Employment Interest and Money. London: Macmillan Co., Ltd.
[08] Zhan, Z and Zhan, M. A. (2017a) A Kind of Neither Keynesian Nor Neoclassical Model (4): The nature of Philips Curve. Open Access Library Journal, 4, e3388.
[09] Cobb, C. W. and P. H. Douglas (1928): “A Theory of Production,” American Economic Review. 18 (Supplement), 139-165.
[10] Zhan, M. A. and Zhan, Z. (2017a) A Kind of Neither Keynesian Nor Neoclassical Model (3): The Inflation Equation. Open Access Library Journal, 4, e3333.
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