A stylized macro-model with interacting real, monetary and stock markets

Abstract We propose a model economy consisting of interdependent real, monetary and stock markets. The money market is influenced by the real one through standard LM equation. Private expenditures depend on prices, which in turn are affected interest rates profits, as these contribute to determine participation level market. An evolutionary mechanism regulates agents’ basis fitness measure that depends comparison between return rate. Relying analytical investigations complemented numerical simulations, we study economically relevant static dynamic properties equilibrium, identifying possible sources instabilities channels they spread across aim at understanding what micro- macro-factors affect dynamics and, same time, how asset ultimately market, behave over business cycle. Starting from isolated markets, show effect increasing interdependence national income, price share agents participate equilibrium. Moreover, investigate stabilizing/destabilizing role integration emergence out-of-equilibrium dynamics.