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This study presents a macroeconomic model of business fluctuations and its estimation for the period 1958-1989 in the US economy. The time frame is the short term (only the fluctuations of the variables around their trends are considered). Actual disequilibrium is modeled; for example, markets do not clear and firms hold unvoluntary inventories. Behaviors are modeled in terms of adjustment to disequilibrium. Money and credit are issued and destroyed. Business fluctuations are viewed as the effect of recurrent switches from periods in which equilibrium is stable and the economy gravitates around equilibrium to periods when it is unstable and broader movements are observed. A stability condition is expressed. Stability appears to be the possible outcome of a conflict between destabilizing and stabilizing "loops": (1) Production stimulates the issuance of money, demand is increased and inventories diminished and, finally, production reinforced, and (2) A large demand diminishes inventories and, thus, encourages the rise of prices, which reduce the issuance of money and, consequently, demand. Both real and monetary mechanisms are involved. Employment merely reflects the fluctuations of output. Distribution conditions stability in the long term, via the impact of the profit rate on firm behavior.

G. Duménil, D. Lévy, "The Real and Monetary Determinants of Macro (In)stability, pp. 118-140", 1994, in M. Glick, Competition, Technology and Money: Classical and Post-Keynesian Perspectives, Edward Elgar : Aldershot, England.

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