Keynesian monetary growth dynamics in open economies

We investigate an open economy monetary growth model with sluggish price an d quantity adjustments. It integrates the real dynamics of Rose's employmen t cycle, an inflationary dynamics of Cagan type, Metzlerian inventory dynam ics and Dornbusch's exchange rate dynamics, implying eight laws of motion, two for each subdynamics. These intrinsically nonlinear 8D dynamics are asy mptotically stable for low adjustment speeds of prices and expectations, gi ve rise to Hopf bifurcations as these adjustment parameters are increased a nd lead to cyclically explosive behavior thereafter. Two extrinsic nonlinea rities are therefore added, one in capital flows and the other a kinked Phi llips curve. These two nonlinearities modify the dynamics radically, limiti ng them to economically meaningful domains even for extreme parameter choic es.