EconPapers    
Economics at your fingertips  
 

Complex Price Dynamics in the Modified Kaldorian Model

Jan Kodera, Quang Tran and Miloslav Vošvrda ()

Prague Economic Papers, 2013, vol. 2013, issue 3, 358-384

Abstract: In this article we analyse a neoclassical model of inflation. Our aim is to reconstruct the neoclassical theory of inflation to obtain a model which generates non-periodical oscillations of price level. This model is considered to be a realistic approximation of actual price level evolution. We start our analysis with the Fisherian equation of exchange. The assumption on non-variability of the velocity of money circulation parameter is relaxed in favour of dependence on expected inflation. The resulting model of inflation is a two-equation model where price evolution depends on production dynamics which is assumed to be an exogenous variable. After that, the two-equation model is re-formulated as an autonomous system to a model where production dynamics is determined by a Kaldorian type's model. By adding Kaldor's model to the two equation system, we create a four equation model. Both our models are able to generate more complex dynamics, i.e. non-linear cycles and chaos, which we examine by generating time series from numerical example and analyse them with the help of an advanced non-linear method.

Keywords: Price dynamics; two-equation model; four-equation model; numerical examples; non-linear time series analysis (search for similar items in EconPapers)
JEL-codes: E32 E37 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://pep.vse.cz/doi/10.18267/j.pep.457.html (text/html)
http://pep.vse.cz/doi/10.18267/j.pep.457.pdf (application/pdf)
free of charge

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:prg:jnlpep:v:2013:y:2013:i:3:id:457:p:358-384

Ordering information: This journal article can be ordered from
Editorial office Prague Economic Papers, University of Economics, nám. W. Churchilla 4, 130 67 Praha 3, Czech Republic
http://pep.vse.cz

DOI: 10.18267/j.pep.457

Access Statistics for this article

Prague Economic Papers is currently edited by Klára Pavlová

More articles in Prague Economic Papers from Prague University of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Stanislav Vojir ().

 
Page updated 2022-07-28
Handle: RePEc:prg:jnlpep:v:2013:y:2013:i:3:id:457:p:358-384