Economic Structure and Nonlinear Dynamic Development

Abstract

Economic growth and development theory, like the economic system itself, is prone to severe cyclical fluctuations in popularity and interest. Important variables, such as population, capital and knowledge, appear and disappear cyclically in dynamic theory, according to social and economic circumstances, not to mention individual interest. For instance, Malthus’ population theory, Ricardo’s two-sector economic system and neoclassical growth theory have been emphasized by different economists in different cultures at different times. This also suggests possible existence of a general framework in which current macroeconomic models can be treated as special cases. It is obvious that such a synthesis, if possible, must be formulated in the form of a high dimensional nonlinear dynamic system. Due to the accumulated efforts of economists and, in particular, due to recent developments of nonlinear dynamic theory (e.g., Haken, 1977, 1983, Nicolis and Prigogine, 1977, Wilson, 1981, Weidlich and Haag, 1983, Rosser, 1991, Zhang, 1991, Dendrinos and Sonis, 1990), it appears that the timing is right for such a synthesis. The purpose of this study is to make an initial attempt in this direction — we try to build a macroeconomic development model, synthesizing Malthus’ population theory, Ricardo’s two-sector economic system and neo-classical growth theory.