A Note on the Stability Properties of Goodwin's Predator-Prey Model
Luís Aguiar-Conraria ()
No 5/2007, NIPE Working Papers from NIPE - Universidade do Minho
Goodwin's Predator-Prey model is structurally unstable. In its pure form, the model has an equilibrium that is neither stable nor unstable. Ploeg showed that relaxing the hypothesis of fixed proportion technology would stabilize the equilibrium. On the other hand, Goodwin showed that the equilibrium becomes unstable when endogenous productivity growth is considered. This paper studies the consequences of considering both effects, and concludes that the stabilizing effect of a flexible technology is much stronger than the destabilizing effect of endogenizing labor productivity.
Keywords: Business cycles; nonlinear dynamics; distributive conflict; Goodwin; Marxian Economics (search for similar items in EconPapers)
JEL-codes: E13 E20 E30 (search for similar items in EconPapers)
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