Impact of Financial Crisis on Economic Growth: A Stochastic Model

Tadmon Calvin () and Njike Tchaptchet Eric Rostand ()
Additional contact information
Tadmon Calvin: Department of Mathematics and Computer Science, Faculty of Science, University of Dschang, P.O Box 67 Dschang, Cameroon
Njike Tchaptchet Eric Rostand: Department of Mathematics and Computer Science, Faculty of Science, University of Dschang, P.O Box 67 Dschang, Cameroon

Stochastics and Quality Control, 2022, vol. 37, issue 1, 45-63

Abstract: In this paper, we develop a stochastic model to analyze how financial contagion may affect economic activity. In the deterministic case, we show that, according to specific parameter values, the economy may converge either to a stress-free equilibrium or to a stressed equilibrium: in the former situation, the level of economic growth is maximal, while in the latter, it is reduced by financial contagion. In the stochastic case, we compute a value around which the level of economic growth oscillates. Numerical simulations are performed to illustrate theoretical results obtained.

Keywords: Stochastic Differential Equations; Financial Crisis; Economic Growth (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1515/eqc-2021-0049 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:ecqcon:v:37:y:2022:i:1:p:45-63:n:7

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/eqc/html

DOI: 10.1515/eqc-2021-0049

Access Statistics for this article

Stochastics and Quality Control is currently edited by George P. Yanev

More articles in Stochastics and Quality Control from De Gruyter
Bibliographic data for series maintained by Peter Golla ().