Experimenting with Dynamic Macromodels: Growth and Cycles by PierCarlo Nicola

By PierCarlo Nicola

This booklet provides a macroeconomic dynamic version � l. a. Solow-Swan, together with the marketplace for labour, in a discrete time constitution. Labour provide is modelled as a reversed S curve (derived within the appendix). The types are elevated to incorporate expenditure on R&D (thus endogenous technical progress), and public expenditure on infrastructures.

For all of the 3 versions, numerical simulations are carried out in MAPLE, and the implications are proven in time sequence figures, which make it effortless to realize that even small alterations within the parameters produce responses within the time behaviour of the most variables: from regular progress, to normal cycles, to chaotic-like time paths.

The simulations convey that cycles don't advertise fabric welfare, as measured by means of overall undiscounted intake alongside the time horizon, and that the comparative motion of R&D as opposed to public expenditure is exactly associated with the values assigned to the parameters.

Show description

Read or Download Experimenting with Dynamic Macromodels: Growth and Cycles PDF

Best econometrics books

Stochastic Limit Theory: An Introduction for Econometricicans (Advanced Texts in Econometrics)

This significant new econometrics textual content surveys contemporary advancements within the swiftly increasing box of asymptotic distribution thought, with a distinct emphasis at the difficulties of time dependence and heterogeneity. Designed for econometricians and complex scholars with constrained mathematical education, the booklet truly lays out the required math and likelihood thought and makes use of a number of examples to make its info helpful and understandable.

Forecasting Non-Stationary Economic Time Series

Economies evolve and are topic to unexpected shifts brought about via legislative adjustments, financial coverage, significant discoveries, and political turmoil. Macroeconometric types are a truly imperfect device for forecasting this hugely complex and altering technique. Ignoring those elements results in a large discrepancy among thought and perform.

Economics of Insurance

The idea of coverage is gifted during this e-book, mentioned from the perspective of the speculation of economics of uncertainty. the main of top rate calculation which the e-book makes use of relies on financial equilibrium conception and differs from a number of the top class structures mentioned through actuaries. Reinsurance is constructed within the framework of normal monetary equilibrium idea below uncertainty.


This can be an excerpt from the 4-volume dictionary of economics, a reference e-book which goals to outline the topic of economics at the present time. 1300 topic entries within the entire paintings conceal the huge subject matters of monetary thought. This extract concentrates on econometrics.

Additional info for Experimenting with Dynamic Macromodels: Growth and Cycles

Example text

4 Of course, given K > 0, there is always a real wage rate clearing the labour market. 4. Note that the case where there are exactly two equilibrium real wage rates is not generic, because labour demand and supply curves must meet in a specific way. 4 depicts the case where there are three possible equilibrium wages for w/p; it is clear that, by considering w/p variable in time according to the difference N − L,5 the first and third solutions are stable, while the second is unstable. This is one of the causes of a business cycle in the macroeconomic models presented in Part 3.

But, in equilibrium FX (Kt , Nt ) = wt is true; so we FK = ∂K have that πt = Kt FK (Kt , Xt ) and profit is positive for all values of Xt , and not only when the labour demand is Nt . , the values obtained when there is no constraint on the optimal quantity of labour demanded by firms. 7) It = πt−1 , meaning that total profits in every period are invested in the next period. 7) state that workers save nothing, while capitalists consume nothing; a more sensible way to consider consumption (and savings) is based on the seminal contribution of Kaldor (1956, pp.

6) becomes: θt+1 = θt + f p p max{0, θt−1 F (Kt−1 , Et−1 ) − wt−1 Et−1 }/wt . 8) Thanks to the total productivity dynamics expressed by this equation, the economy is no longer an economy operating under stationary conditions; it is capable of becoming a progressive economy. But this is no more the consequence of an exogenously increasing labour force, as in Solow’s model, which was summarized in Chapter 1, or of exogenous technical progress; presently, it is due to the increased total productivity induced by the endogenous technical progress generated by R&D activity.

Download PDF sample

Rated 4.33 of 5 – based on 15 votes