An Empirical Test on Harrod’s Open Economy Dynamics

Giuseppe Orlando and Fabio Della Rossa
Additional contact information
Fabio Della Rossa: Department of Electronics, Information and Bioengineering, Politecnico di Milano, Piazza Leonardo da Vinci 32, I-20133 Milano, Italy

Mathematics, 2019, vol. 7, issue 6, 1-13

Abstract: This paper has the objective to empirically test Harrod’s explanations of economic dynamics addressing both growth and business cycles. In particular we test Harrod’s speculation that opening the economy to foreign trade could lead to a reduction of cyclical instability. The main variables determining the dynamic behaviour are wealth, savings, competitiveness and, therefore, balance of trade. The behaviour of the model under scrutiny is highly non-linear and the conclusion is that stable cycles are possible only under particular conditions. In fact, this empirical test shows a stable long-run pattern for those specific parameters.

Keywords: Harrod’s dynamics; determinism; numerical chaos; economic growth; business cycles (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2227-7390/7/6/524/pdf (application/pdf)
https://www.mdpi.com/2227-7390/7/6/524/ (text/html)

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:gam:jmathe:v:7:y:2019:i:6:p:524-:d:238351

Access Statistics for this article

Mathematics is currently edited by Ms. Emma He

More articles in Mathematics from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().