Abstract
A purpose of this paper is to formulate a continuous dynamical model for a small closed economy with a simple structure and with a minimum number of non-linearities. A basis of this model is developed from dynamical Kaldorian model. Variables in the modified dynamical Kaldorian model are in a logarithm scale. A form of the logistic function is used for non-linear connections in this model. The model is formed by four differential equations. First two equations create relatively closed sub-model generating both production and capital stock trajectories. Two other equations describe the price level dynamics as a consequence of money market disequilibrium and continuously adaptive expectation of inflation. Our investigation is firstly aimed to investigate a dynamics of the production and capital stock. Secondly to compute Ljapunov exponents for a simple model of closed economy showing its a chaotic behavior. Simulation studies are performed on numerical calibrated model.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.