Time, Bifurcations and Economic Applications

Bosi Stefano () and Lionel Ragot ()
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Bosi Stefano: THEMA, Universite de Cergy-Pontoise

No 2010-01, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: In this paper,we show how to recover discrete-time models from their continuous-time versions through Euler discretizations. In the first part, we introduce general polynomial discretizations in backward and forward looking and we study the preservation of stability properties and local bifurcations under different discretizations. In the second part, we apply these results to popular growth models. We show how to reconcile the traditional Solow models in discrete and continuous time through a backward-looking discretization. Discrete-time models of endogenous saving, suchas Ramsey(1928), need hybrid discretizations of the continuous-time model because of the forward-looking nature of the Euler equation. The introduction of externalities allows us to illustrate the preservation of stability properties and local bifurcations.

Keywords: discretizations; bifurcations; growthmodels (search for similar items in EconPapers)
JEL-codes: C02 C61 C62 O41 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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http://thema.u-cergy.fr/IMG/documents/2010-01.pdf (application/pdf)

Related works:
Working Paper: Time, bifurcations and economic applications (2009)
Working Paper: Time, bifurcations and economic applications (2009)
Working Paper: Time, bifurcations and economic applications (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2010-01

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