Random Economic Disturbances and Lagged Countermeasures

Franz Gehrels

Atlantic Economic Journal, 2005, vol. 33, issue 2, 157 pages

Abstract: Fluctuations in domestic product and balance of payments are treated as Markov processes in discrete time instead of as deterministic paths. Emphasis is on the case when movements are in probability away from steady-state paths until they reach some barrier. The initiating disturbances are random events, and the task of policymakers is to respond with countervailing measures. These occur with time lags and produce stochastic processes of their own. The outcome is a probabilistic path which never quite matches the desired steady-state path. The first, one-dimensional case is that of the domestic product and the government budget. Next, the paper deals with the two-dimensional case of domestic product and balance of trade, with budget and exchange rate as instruments. Finally, it treats domestic product, trade balance, and capital account—using the budget, the exchange rate, and the monetary measures—as corrective devices. Copyright International Atlantic Economic Society 2005

Keywords: E12; F41 (search for similar items in EconPapers)
Date: 2005
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1007/s11293-005-3759-9 (text/html)
Access to full text is restricted to subscribers.

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:kap:atlecj:v:33:y:2005:i:2:p:151-157

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11293/PS2

DOI: 10.1007/s11293-005-3759-9

Access Statistics for this article

Atlantic Economic Journal is currently edited by Kathleen S. Virgo

More articles in Atlantic Economic Journal from Springer, International Atlantic Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().