Cycles and Crises in a Model of Debt-financed Investment-led Growth

Soumya Datta

MPRA Paper from University Library of Munich, Germany

Abstract: The paper demonstrates possibilities of both convergence to the steady state and emergence of stable growth cycles around it in a simple macrodynamic model of debt-financed investment-led growth. The growth cycles are robust and are generated endogenously, either due to the existence of a supercritical Andronov-Hopf bifurcation, or due to the global stability condition through an application of the Poincaré-Bendixson theorem. The emergence of multiple limit cycles is also observed under certain conditions. The possibility of a deterioration of financial variables during a boom, with the resulting financial crisis providing an endogenous ceiling to a business cycle is examined in this context.

Keywords: Growth cycles; Financial crisis; Fisher; Minsky; Andronov-Hopf bifurcation; Limit cycles. (search for similar items in EconPapers)
JEL-codes: C62 C69 E12 E32 E44 G01 (search for similar items in EconPapers)
Date: 2012-12-12, Revised 2012-12-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:50200

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