Convergence, cycles and complex dynamics of financing investment

Soumya Datta

MPRA Paper from University Library of Munich, Germany

Abstract: This paper demonstrates the diverse dynamical possibilities of a simple macroeconomic model of debt-financed investment-led growth in the presence of interest rate rules. We show possibilities of convergence to steady state, growth cycles around it as well as various complex dynamics from codim 1 and codim 2 bifurcations. The effectiveness of monetary policy in the form of interest rate rules is examined under this context.

Keywords: Growth cycles; Hopf bifurcation; complex dynamics; Taylor rule (search for similar items in EconPapers)
JEL-codes: C62 C69 E12 E32 (search for similar items in EconPapers)
Date: 2013-03-22, Revised 2013-12-10
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:52111

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