Difference Equations

Wolfgang Eichhorn and Winfried Gleißner
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Wolfgang Eichhorn: Karlsruhe Institute of Technology (KIT)
Winfried Gleißner: University of Applied Sciences Landshut

Chapter 12 in Mathematics and Methodology for Economics, 2016, pp 565-596 from Springer

Abstract: Abstract For many problems in economics it is more adequate to give them a discrete formulation than a continuous one. This leads to difference equations instead of differential equations. Their theories are quite similar. We discuss linear difference equations of first and second order and present some models: the growth model of Harrod, settlement of bond issues, distribution of wealth, and the multi-sector multiplier model. The chapter continues with systems of linear difference equations and finishes with nonlinear difference equations, which necessarily in most cases leads to a phenomenon, which is called chaos in mathematics.

Keywords: Difference Equation; Constant Coefficient; National Income; Linear Difference Equation; Nonlinear Difference Equation (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/978-3-319-23353-6_12

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