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Lux, Thomas
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[Journal:] Jahrbuch für Sozialwissenschaft [ISSN:] 0075-2770 [Publisher:] Vandenhoeck & Ruprecht [Place:] Göttingen [Volume:] 42 [Year:] 1991 [Issue:] 2 [Pages:] 224-233
In this paper an inflationary regime is added to the Metzlerian inventory cycle model. It is shown that for all originally instable parameter values the time paths are stabilized to limit cycle oscillations between the Keynesian and the inflationary regimes. This result is due to the fact that the inflationary regime reacts like an upper limit for economic activity. Therefore one contribution of disequilibrium economics to business cycle theory may be a consistent formulation of the ideas of ceilings and floors.
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