@article{article_371156, title={A Non-Walrasian Analysis of Asset Price Movements under the Tobin-Blanchard-Samuelson Model: A System Dynamics Approach}, journal={Yildiz Social Science Review}, volume={3}, pages={121–136}, year={2017}, author={Öğüt, Kaan İrfan and Şahin, Serçin}, keywords={Walrasçı Olmayan Analiz,Sistem Dinamiği,Tobin q Teorisi}, abstract={<p class="MsoNormal" style="margin-top:6pt;margin-right:0cm;margin-bottom:6pt;margin-left:0cm;text-align:justify;line-height:150%;"> <span lang="en-us" style="font-size:12pt;line-height:150%;font-family:’Times New Roman’, serif;" xml:lang="en-us">The purpose of this paper is to analyze the dynamics of stock
price movements as an example of asset prices, under the conditions of
different expectation formations and to show the effects of an expansionary
monetary policy on these movements. This analysis applies the model established
by Blanchard <span lang="tr" xml:lang="tr">(1981) </span>
based on the standard <i>IS-LM Model </i> and
expanded with <i>Tobin’s q Theory </i>. </span> </p> <p> </p> <p class="MsoNormal" style="margin-top:6pt;margin-right:0cm;margin-bottom:6pt;margin-left:0cm;text-align:justify;line-height:150%;"> <span lang="en-us" style="font-size:12pt;line-height:150%;font-family:’Times New Roman’, serif;" xml:lang="en-us">Although Blanchard set his model as a differential equation
system with two dynamic variables (real income </span> <span lang="en-us" style="font-size:11pt;line-height:115%;font-family:Calibri, ’sans-serif’;" xml:lang="en-us"> </span> <span lang="en-us" style="font-size:12pt;line-height:150%;font-family:’Times New Roman’, serif;" xml:lang="en-us"> and real stock market value </span> <span lang="en-us" style="font-size:11pt;line-height:115%;font-family:Calibri, ’sans-serif’;" xml:lang="en-us"> </span> <span lang="en-us" style="font-size:12pt;line-height:150%;font-family:’Times New Roman’, serif;" xml:lang="en-us">), he probably did
so due to difficulty of visual expression of more variables. System dynamics
approach provides an opportunity to add the real interest rate </span> <span lang="en-us" style="font-size:11pt;line-height:115%;font-family:Calibri, ’sans-serif’;" xml:lang="en-us"> </span> <span lang="en-us" style="font-size:12pt;line-height:150%;font-family:’Times New Roman’, serif;" xml:lang="en-us"> as a third variable and to use time lag values
of some variables, as Samuelson <span lang="tr" xml:lang="tr">(1939) </span>
did in his study. </span> </p> <p> </p> <p class="MsoNormal" style="margin-top:6pt;margin-right:0cm;margin-bottom:6pt;margin-left:0cm;text-align:justify;line-height:150%;"> <span lang="en-us" style="font-size:12pt;line-height:150%;font-family:’Times New Roman’, serif;" xml:lang="en-us">Moreover, with this dynamic approach, we modeled the asset
price expectations and wealth accumulation in the form of differential equations.
The main distinguishing factor of this paper is a non-Walrasian analysis method
that allows trade under uncertain market conditions in which demand-supply
equality is not satisfied. Furthermore, this analysis differentiates between
the desired and realized demands and supplies of equities and bonds of firms
and households. Thus, we can consider buying and selling actions under the possibility
of excess demand or excess supply for assets. </span> </p> <p> </p> <p> </p> <p class="MsoNormal" style="margin-top:6pt;margin-right:0cm;margin-bottom:6pt;margin-left:0cm;text-align:justify;line-height:150%;"> <span lang="en-us" style="font-size:12pt;line-height:150%;font-family:’Times New Roman’, serif;" xml:lang="en-us">Under the framework of the expanded Blanchard <span lang="tr" xml:lang="tr">(1981) </span> model, we analyzed
the influence of the expansionary monetary policy on stock price with a
different type of expectation formations like naive (static), adaptive, and
trend following.     </span> </p> <p> </p>}, number={2}, publisher={Yıldız Teknik Üniversitesi}