Original article Macroeconomics and Monetary Economics

Dynamic disequilibrium and investment - saving imbalance

Yuli Radev - UMG “St. Ivan Rilski”
Received: 10 Jun 2022
Revised:
Published:
Downloads: 0
Citations: 0
Issue 4/2016
JEL C62 D50 E30 E58
DOI https://doi.org/10.56497/etj1661404

Abstract

The financial crises of 2007-2011 put the new neoclassical synthesis to a serious test and became the occasion for harsh criticism from both the neoclassical school and New Keynesianism. The idea of dynamic disequilibrium is once again in the spotlight, and the investment-savings imbalance turns out to be the most logical explanation for the pathological deviations from normal economic development. In this connection, the investment-savings imbalance and the possibilities of quantifying this problem within the framework of dynamic stochastic general equilibrium models are discussed. The analysis is presented through the prism of the non-equilibrium, which inherits the main features of the neo-equilibrium (see Radev, 2011).

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