Reproduction and temporary disequilibrium: a Classical approach
Christian Bidard (),
Edith Klimovsky and
No 2010-23, EconomiX Working Papers from University of Paris Nanterre, EconomiX
We build a bisector reproduction model with classical features in which the capitalists aim at maximizing accumulation of their profits. At variance with gravitation models, it is assumed that they invest their profits in their own industry. Their plans are based on actual productions and expected prices. Effective prices and effective allocations of resources are determined by a market-clearing mechanism. A simple law on the formation of expectations allows us to define the dynamics of disequilibria, which let appear endogenous self-sustained fluctuations, around a long-run path. The long-run rate of growth and the amplitude of the fluctuations depend on the initial conditions.
Keywords: Classical Reproduction; Market prices; Disequilibrium; Growth; Cycle (search for similar items in EconPapers)
JEL-codes: E11 E30 E32 O41 (search for similar items in EconPapers)
Pages: 24 pages
New Economics Papers: this item is included in nep-mac and nep-mic
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Journal Article: REPRODUCTION AND TEMPORARY DISEQUILIBRIUM: A CLASSICAL APPROACH (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:drm:wpaper:2010-23
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