An endogenous Goodwin–Keynes business cycle model: evidence for Germany (1991–2007)

Abstract

This article studies business cycles with the use of a novel Goodwin–Keynes type model. Based on its derived equations of motion and dynamic properties, we estimate the proposed model for the case of the German economy, the locomotive of the EMU, in the period 1991 to 2007, using relevant econometric techniques. The empirical estimation of the proposed model is very satisfactory, in contrast to previous efforts to empirically implement the original Goodwin model.

Keywords:

• Keynes
• Goodwin
• endogenous business cycles
• Germany

JEL Classification:

• C51
• C62

Acknowledgement

We are indebted to Roberto Veneziani and Lefteris Tsoulfidis for constructive comments on previous versions of this article. The usual disclaimer applies.

Notes

¹ All proofs are straightforward and are available upon request by the authors.