Neo-Keynesian and Neo-Classical Macroeconomic Models: Stability and Lyapunov Exponents

Jan Kodera, Karel Sladký () and Miloslav Vošvrda

No 2006/10, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

Abstract: The non-linear approach to economic dynamics enables us to study traditional economic models using modified formulations and different methods of solution. In this article we compare dynamical properties of Keynesian and Classical macroeconomic models. We start with an extended dynamical IS-LM neoclassical model generating behaviour of the real product, interest rate, expected inflation and the price level over time. Limiting behaviour, stability, and existence of limit cycles and other specific features of these models will be compared.

Keywords: macroeconomic models; Keynesian and classical model; nonlinear differential equations; linearization; asymptotical stability; Lyapunov exponents S (search for similar items in EconPapers)
JEL-codes: C00 E12 E13 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2006-04, Revised 2006-04
New Economics Papers: this item is included in nep-cba and nep-mac
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