Macroeconomics: What can we Learn from the Dynamical Systems Literature?

Abstract

In this paper we emphasize the importance of dynamical systems in economics,especially in macroeconomics, because of the inherent presence of intertemporal decisions. Furthermore, we highlight how one can study different dynamical systems and economies by studying their associated invariant objects. These objects are theskeletonof the dynamical system, and they help us understand the evolution of the dynamical system Finally, we describe some features and limitations of one of the most widely used software that can be readily used with macroeconomic applications.