Dynamic Equilibrium Theory Research Articles

Modeling the Effect of Exchange Rate Liberalization on China’s Macro Economy

The empirical characteristics of domestic and foreign interest rate shocks are obtained by using VAR method: the domestic interest rate regulation is counter-cyclical, and the increase of foreign interest rate leads to the increase of domestic output and inflation. On this basis, we construct a small open dynamic stochastic general equilibrium theory framework which reflects the empirical characteristics, including exchange rate control, to analyze the macroeconomic effects of exchange rate liberalization reform. By volatility simulation, impulse response and social welfare loss function analysis, the empirical results show that: firstly, exchange rate reform would increase volatility of output and exchange rate, but reduce volatility of inflation and interest rate. Secondly, exchange rate reform enhances the impact of domestic interest rate shocks on output and inflation. Which means the reform would improve the control ability of interest rate as a monetary policy tool. Moreover, the reform increases loss of social welfare. The conclusion shows that the exchange rate liberalization should be implemented step by step. The government should accelerate the reform when the external macro economy is stable. Otherwise it will cause a larger economic volatility.

Post-Keynesian dynamic stochastic general equilibrium theory

This paper explains the connection between ideas developed in my recent books and papers and those of economists who self-identify as post-Keynesians. My own work is both neoclassical and ‘old Keynesian.’ Much of my published work assumes that people have rational expectations and that ‘animal spirits’ should be modeled as a new fundamental. I adopt a general equilibrium framework to model the macroeconomy. But although I write from a neoclassical tradition the themes I explore in my published writing have much in common with heterodox economics. This paper explains the common elements between these seemingly disparate traditions. I make the case for unity between post-Keynesian and general equilibrium theory under the banner of post-Keynesian dynamic stochastic general equilibrium theory.

Corruption and Growth in a Dynamic General Equilibrium Model

This study introduces some new perspectives of bureaucratic corruption into the dynamic general equilibrium theory recently proposed by Zhang. The main concern of our study is the role of corruption on economic growth and income and wealth distribution between the officials and workers. The economy is composed of the industrial sector and public sector. The population is classified into officials and workers. Corruption takes places through many channels. Officials take brides from producers and households. The model describes dynamic interactions of growth, corruption with fixed tax rate and corruption rates. We simulate the model to demonstrate existence of equilibrium and motion of the dynamic system. We also examine effects of changes in different parameters on the motion of the economic system.

Stability theories of nanobubbles at solid–liquid interface: A review

As nanobubbles are of far-reaching application in interface science, mining science, medical treatment, sewage treatment and other fields, researchers have carried out considerable research on the properties and influencing factors of nanobubbles. However, the abnormal lifetime of nanobubbles—super stability is still an open question. According to the classical thermodynamic theories, bubbles at the nanoscale in water should be dissolved quickly, but a great number of research results in recent years indicate that nanobubbles can exist at the solid–liquid interface stably. The thorough understanding and mastery of the underlying stability mechanism of nanobubbles is the premise of the research and applications of nanobubbles. In this paper, the interfacial nanobubbles stability theories and models in recent ten years are reviewed, including contamination (impurity) theory, dynamic equilibrium theory and its extension theory, contact line pinning effect and nanobubbles internal pressure theory, etc. Furthermore, some suggestions for the future research on stability theories are proposed and the research focuses and development directions of nanobubbles in the future are also prospected.

Formation process of in situ oxide coatings with high porosity using one-step plasma electrolytic oxidation

Porous oxide films prepared via plasma electrolytic oxidation are ideal in situ catalysts. However, such films have low porosity. To overcome this limitation, we proposed a promising approach that controls discharge events. The treatments were performed in two kinds of alkaline-silicate solutions namely KOH-enriched solution and Na2SiO3-enriched solution. The coatings prepared in the former electrolyte exhibited superior growth behaviors and catalytic structures. Due to the strong corrosive of KOH-enriched electrolyte, the growth of the film was suppressed, and the sparks were maintained small and evenly distributed throughout the process. Such layers showed high porosity and were evenly covered by nanoparticles. The coating porosity increased with increasing time, and the film treated for 60min exhibited a high porosity of 33.3±1.7%. Moreover, an oxide film with an outer dendritic and inner porous structure was formed within 120min. The energy dispersive X-ray spectroscopy and X-ray photoelectron spectroscopy characterizations indicated that the coatings were mainly composed of aluminum oxide and that the doped iron oxide was enriched on the top surface of the coating. Finally, the formation mechanisms of the coating and nanoparticles were discussed with consideration of the dynamic equilibrium theory.

The Logic of Imitative Processes: Imitation as Secondary Innovation – an Axiomatic Schumpeterian Analysis

This paper offers an axiomatic analysis of the imitative activity of producers in a Schumpeterian process of innovative change. It argues that structural change in the economy is generated by leaders of radical innovation, whose actions trigger the diffusion of innovations, and whose strategies and innovations can be copied by imitators. As a consequence, these imitators become second-order innovators operating in a production system that is deprived of primary innovators. The paper demonstrates that increases in the number and variety of second-order innovators can intensify innovative changes throughout the production system. Furthermore, this logic can be reconstructed by reference to the research programme on modelling Schumpeterian innovative evolution within the Arrow-Debreu dynamic general equilibrium theory.

Income and wealth inequality with progressive income taxation in an integrated Walrasian-general equilibrium and neoclassical growth theory

This study develops a dynamic economic growth model of public goods in a dynamic general equilibrium theory for an open economy with heterogeneous households and progressive income taxation. The tax income is spent on supplying public goods. The economic system consists of one production sector and one public sector. The public sector is financially supported solely by the tax income. The model describes dynamic interactions between economic growth, wealth accumulation, progressive income taxation, and public services in an internationally open environment. The model is developed for any number of types of households. We simulate the model to demonstrate the existence of equilibrium and motion of the dynamic system. We also examine the effects of changes in different parameters on the motion of the economic system.

Income and wealth inequality with progressive income taxation in an integrated Walrasian-general equilibrium and neoclassical growth theory

This study develops a dynamic economic growth model of public goods in a dynamic general equilibrium theory for an open economy with heterogeneous households and progressive income taxation. The tax income is spent on supplying public goods. The economic system consists of one production sector and one public sector. The public sector is financially supported solely by the tax income. The model describes dynamic interactions between economic growth, wealth accumulation, progressive income taxation, and public services in an internationally open environment. The model is developed for any number of types of households. We simulate the model to demonstrate the existence of equilibrium and motion of the dynamic system. We also examine the effects of changes in different parameters on the motion of the economic system.

Active Life Expectancy of Elderly Koreans, 1994–2011

Drawing on data from South Korea, this paper attempts to assess three dominant views on the evolution of morbidity and mortality of the elderly: expansion of morbidity, compression of morbidity, and dynamic equilibrium. The expansion of morbidity perspective argues that elongated life expectancy would comprise of, in large part, disabled life expectancy. The compression of morbidity theory suggests that increases in active life expectancy correspond to increases in total life expectancy. The dynamic equilibrium theory posits that, though overall levels of morbidity would rise, the prevalence of severe disability would decrease. The study is based on mortality data from Life Tables for Korea and the morbidity data from five nationally representative cross-sectional surveys conducted in 1994, 1998, 2004, 2008, and 2011. Sullivan's method is used to compute the active, mildly disabled, and severely disabled life expectancies. Results reveal that the total life expectancy of elderly Koreans has markedly increased, and this has been accompanied by an impressive extension of active life expectancy. In addition, results show negligible declines in the mildly disabled life expectancy but rapid drops in the severely disabled life expectancy. Collectively, these observations strongly support the compression hypothesis, and provide partial support for a dynamic equilibrium.

Predicting long‐term and short‐term tidal flat morphodynamics using a dynamic equilibrium theory

AbstractDynamic equilibrium theory is a fruitful concept, which we use to systematically explain the tidal flat morphodynamic response to tidal currents, wind waves, sediment supply, and other sedimentological drivers. This theory stems from a simple analytical model that derives the tide‐ or wave‐dominated tidal flat morphology by assuming that morphological equilibrium is associated with uniform bed shear stress distribution. Many studies based on observation and process‐based modeling tend to agree with this analytical model. However, a uniform bed shear stress rarely exists on actual or modeled tidal flats, and the analytical model cannot handle the spatially and temporally varying bed shear stress. In the present study, we develop a model based on the dynamic equilibrium theory and its core assumption. Different from the static analytical model, our model explicitly accounts for the spatiotemporal bed shear stress variations for tidal flat dynamic prediction. To test our model and the embedded theory, we apply the model for both long‐term and short‐term morphological predictions. The long‐term modeling is evaluated qualitatively against previous process‐based modeling. The short‐term modeling is evaluated quantitatively against high‐resolution bed‐level monitoring data obtained from a tidal flat in Netherlands. The model results show good performances in both qualitative and quantitative tests, indicating the validity of the dynamic equilibrium theory. Thus, this model provides a valuable tool to enhance our understanding of the tidal flat morphodynamics and to apply the dynamic equilibrium theory for realistic morphological predictions.

General Equilibrium Theory Behind the Iron Curtain: The Case of Victor Polterovich

In this article we address the story of developments in general equilibrium theory in the Soviet Union during the 1970s through the lens of a single biography. The Soviet advances in mathematical economics give an occasion to reflect on the extension of the Walrasian paradigm to nonmarket societies, as well as on the ideological effects of general equilibrium theory and its interpretations in a Soviet context. Our contribution is focused on the development of general equilibrium theorizing in the work of Victor Meerovich Polterovich (b. 1937), who has been one of the leading figures in mathematical economics and general equilibrium theory in the Soviet Union and post-Soviet Russia. His papers on the abstract models of exchange, dynamic general equilibrium and optimal growth theory, excess demand correspondences, monotonicity of demand functions, and disequilibrium theory were for the most part published in English and gained considerable attention within the field. We reconstruct the political and ideological basis of the general equilibrium concept and show how abstract mathematical models reflected the discursive shift from optimal centralized planning to various forms of decentralization. We argue that the Soviet work on general equilibrium was a part of the global development of mathematical economics but was not integrated into it institutionally.

Effect of Different Pretreatment Methods on the Measurement of the Entrapment Efficiency of Liposomes and Countermeasures in Free Drug Analysis

Further investigation into the methods for the analysis of the entrapment efficiency of liposomes has been prompted by the urgent need to improve traditional methods which offer more risk to liposome leakage. The aim of this study was to investigate the suitability of hollow fiber centrifugal ultrafiltration (HF-CF-UF) coupled with HPLC as an alternative method for the routine determination of the entrapment efficiency of liposomes and to compare it with previously developed nonequilibrium procedures based on size-exclusion chromatography (SEC). By comparison, evaluation of the entrapped fraction with SEC resulted in 3 or 4 % lower entrapment values. More importantly, the free drug concentrations were three- to sixfold higher than with HF-CF-UF. In addition, we investigated the reasons for the different values obtained with SEC and a dynamic equilibrium theory was put forward based on this. In addition, we have developed and characterized an equilibrium method of separating free and liposomal drugs for liposomal formulations based on HF-CF-UF. The method was validated over the concentration range of 7.9–235 μg mL−1 for indomethacin and 0.258–8.24 μg mL−1 for vitamin A. Inter- and intra-day precision (RSD %) were ≤1.2 % for indomethacin and ≤1.8 % for vitamin A, respectively. The recoveries of both free drug and total drug were higher than 96.0 % with RSD ≤1.3 % (n = 5). Taken together, our improved method differs from those previously reported with regard to higher recovery, small sample volume, less laborious, and most importantly without damaging or disturbing liposomes. Validation results suggested that our method was sufficiently accurate and sensitive to be used to evaluate the entrapment efficiency of a liposome formulation without complicated pretreatment.

General Equilibrium Theory Behind the Iron Curtain: The Case of Victor Polterovich

In this paper we address the story of developments in general equilibrium theory (GET) in the USSR during the 1970s through the lens of a single biography. The Soviet advances in mathematical economics, only fragmentarily known in the West, give an occasion to reflect on the extension of the Walrasian paradigm to non-market societies, as well as on the ideological effects of GET and its interpretations in a Soviet context. Our contribution is focused on the development of general equilibrium theorizing in the work of Victor Meerovich Polterovich (b. 1937) who has been one of the leading figures in mathematical economics and general equilibrium theory in the USSR and post-Soviet Russia. His papers on the abstract models of exchange, dynamic general equilibrium and optimal growth theory, excess demand correspondences, monotonicity of demand functions, and disequilibrium theory were for the large part published in English and gained considerable attention within the field. We reconstruct the political and ideological basis of the general equilibrium concept and show how abstract mathematical models reflected the discursive shift from optimal centralized planning to various forms of decentralization. We argue that the Soviet work on general equilibrium was a part of the global development of mathematical economics but was not integrated into it institutionally.

The challenge of defining wellbeing

Wellbeing is a growing area of research, yet the question of how it should be defined remains unanswered. This multi-disciplinary review explores past attempts to define wellbeing and provides an overview of the main theoretical perspectives, from the work of Aristotle to the present day. The article argues that many attempts at expressing its nature have focused purely on dimensions of wellbeing, rather than on definition. Among these theoretical perspectives, we highlight the pertinence of dynamic equilibrium theory of wellbeing (Headey & Wearing, 1989), the effect of life challenges on homeostasis (Cummins, 2010) and the lifespan model of development (Hendry & Kloep, 2002). Consequently, we conclude that it would be appropriate for a new definition of wellbeing to centre on a state of equilibrium or balance that can be affected by life events or challenges. The article closes by proposing this new definition, which we believe to be simple, universal in application, optimistic and a basis for measurement. This definition conveys the multi-faceted nature of wellbeing and can help individuals and policy makers move forward in their understanding of this popular term.

Dependence of the Average Size of Particles Formed during Steady Mixing on their Concentration in Immiscible Polymer Blends

A linear increase in the size of ethylene-propylene rubber particles with its content in polypropylene matrix at steady mixing in a batch mixer was observed. This type of the dependence is predicted by the theory of dynamic equilibrium between the droplet breakup and coalescence. However, theoretical calculation of droplet radius extrapolated to zero concentration of EPR and slope of the dependence of droplet radius versus concentration, based on the effective shear rate (related to mixing conditions), are in strong disagreement with the experimental results. Reasons for these discrepancies between theories and experimental results are thoroughly elucidated.

Confidence, Crashes and Animal Spirits

This article is an attempt to reformulate what I take to be two key insights from Keyness General Theory (Keynes, 1936). The first is that there is something profoundly different about the labour market from most other markets in the economy. The second is that the beliefs of participants in the asset markets have an independent influence on economic activity. In the language of modern dynamic general equilibrium theory, we would say that there is a continuum of labour market equilibria and that beliefs about the value of the stock market select an equilibrium. The General Theory contains many ideas, some of which are internally inconsistent, and Keynes did not try to reconcile his theory with Walrasian economics. That task was carried out by a group of interpreters, including Hansen (1936) and Hicks (1937). The current dominant paradigm, new-Keynesian economics, originated with the third edition of Samuelson’s (1955) undergraduate textbook in which he introduced the idea of the neoclassical synthesis. According to this doctrine, the economy is Keynesian in the short run but classical in the long run. The short run is defined as the period over which not all prices have had time to adjust to their Walrasian levels. This article introduces a different interpretation of the key ideas from the General Theory. 1 Although my work is inspired by Keynesian economics, this article is not about the history of thought. I offer a way of formulating the idea that market economies are not inherently self-stabilising without assuming that prices or wages are prevented from adjusting to their equilibrium levels by some kind of friction. Instead, I claim that high, persistent unemployment is a potentially permanent feature of a market economy in a steady-state equilibrium.

O5-5.6 Evaluation of the compression expansion and dynamic equilibrium theories using western Australian linked hospital morbidity and mortality data

IntroductionThree hypotheses have been advanced to predict changes in population health in countries experiencing low birth and death rates, and increasing expectation of life. Determining which of these best accounts...

Future disability projections could be improved by connecting to the theory of a dynamic equilibrium

Objective Projections of future trends in the burden of disability could be guided by models linking disability to life expectancy, such as the dynamic equilibrium theory. This article tests the key assumption of this theory that severe disability is associated with proximity to death, whereas mild disability is not. Study Design and Setting Using data from the GLOBE study (Gezondheid en Levensomstandigheden Bevolking Eindhoven en omstreken), the association of three levels of self-reported disabilities in activities of daily living with age and proximity to death was studied using logistic regression models. Regression estimates were used to estimate the number of life years with disability for life spans of 75 and 85 years. Results Odds ratios of 0.976 (not significant) for mild disability, 1.137 for moderate disability, and 1.231 for severe disability showed a stronger effect of proximity to death for more severe levels of disability. A 10-year increase of life span was estimated to result in a substantial expansion of mild disability (4.6 years) compared with a small expansion of moderate (0.7 years) and severe (0.9 years) disability. Conclusion These findings support the theory of a dynamic equilibrium. Projections of the future burden of disability could be substantially improved by connecting to this theory and incorporating information on proximity to death.

Una Revisión de la Interpretación Económica sobre la Innovación

Theorists have employed two conflicting approaches in order to understand the economic concept of innovation: the classical theory of static equilibrium where innovation is interpreted as being exogenous to the economic system, and the dynamic equilibrium theory of endogenous technological change. Despite progress in studies and inquiries on the second model, research in and teaching of economics remain dominated by the first approach. This review discusses the differences between science, technology and innovation and implications of dynamic equilibrium theory in understanding the economy and wealth creation processes.

Out of the corridor: Keynes and the crisis

We should learn from Keynes to focus on the macroproblems of our day. Today’s problem is the financial crisis and the resulting great recession. Neither the standard Keynesian policies of decades past nor the monetary policy doctrine of recent years provides useful solutions. Dynamic stochastic general equilibrium theory is part of the crisis wreckage, but turning to old or to New Keynesian theory will be of little use. A balance sheet recession requires that policy address the problems in the private sector’s capital as well as its income accounts. We need serious theoretical work on problems of system stability using, for example, agent-based methods. Monetary theory needs to develop analysis of processes in which intertemporal budget constraints are violated. Network theory will be useful in that quest.