Towards Applied Disequilibrium Growth Theory: IV Numerical Investigations of the Core 18D Model

Carl Chiarella, Peter Flaschel and Peiyuan Zhu

No 96, Working Paper Series from Finance Discipline Group, UTS Business School, University of Technology, Sydney

Abstract: In this paper we investigate, from the numerical perspective, the 18D core dynamics of a theoretical 39D representation of an applied disequilibium model of monetary growth of a small open economy. After considering the model from the viewpoint of national accounting, we provide a compact description of the intensive form of the model, its laws of motion and accompanying algebraic expressions and its unique interior steady state solution. We then give a survey of various types of subsystems that can be decomposed from the integrated 18D dynamics by means of suitable assumptions and also survey the feedback channels that can typically be found in these decomposed or re-integrated model types. These subsystems and their partial or full integration are investigated and compared in the remainder of the paper from the perspective of bifurcation diagrams that separate situations of asymptotic stability from stable cyclical behavior as well as pure explosiveness. In this way we lay the foundations for future extensions of the paper, which will show, in contract to what is generally believed to characterize structural macroeconomic models, that applied integrated macrodynamical systems can have a variety of interesting attractors and transients to them. Such attractors are obtained in particular when locally explosive situations are turned into bounded dynamics by the addition of specifically tailored extrinsic nonliearities.

Keywords: structural macroeconomic models; decompositions; re-integration; feedback channels; stability basins (search for similar items in EconPapers)
JEL-codes: E12 E32 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2003-04-01
New Economics Papers: this item is included in nep-cmp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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