The Non-Robustness of Saddle-Point Dynamics: A Methodological Perspective

Donald A. R. George ()
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Donald A. R. George: University of Edinburgh

Chapter 9 in Keynesian, Sraffian, Computable and Dynamic Economics, 2021, pp 231-252 from Springer

Abstract: Abstract The property of robustness is defined in connection with macroeconomic models. Models involving saddle-point dynamics are shown not to have this property, raising serious methodological difficulties. Examples from economic growth theory and the theory of inflation are discussed. The proposed solution to these problems is to embrace non-linear dynamic models in macroeconomics and to analyse them without recourse to local linearization.

Keywords: Saddle-point; Robustness; Growth; Inflation; Rational expectations (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-58131-2_9

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DOI: 10.1007/978-3-030-58131-2_9

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