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Structure and Macroeconomic Performance: Heterogeneous Firms and Financial Fragility

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New Tools of Economic Dynamics

Part of the book series: Lecture Notes in Economics and Mathematical Systems ((LNE,volume 551))

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Summary

In this paper we adopt a new macrodynamic tool, i.e. a system of non-linear difference equations describing the evolution over time of the first and second moments of the distribution of firms’ degrees of financial robustness captured by the ratio of the equity base to the capital stock - the equity ratio for short - which affects supply and capital accumulation decisions. For particular configurations of parameters the dynamic patterns of the average equity ratio and the variance generate irregular and asymmetric time series in which growth and fluctuations are jointly determined (fluctuating growth).

We also thank participants to seminars held at the meeting of the European Economic Association in Istanbul, LATAPSES at the University of Nice, CENDEF at the University of Amsterdam, University of Ancona and University of Bergamo for useful comments and criticisms. Special thanks to the referees for their insightful comments and criticisms. The usual disclaimer applies.

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Author information

Authors and Affiliations

  1. ITEMQ, Università Cattolica, Milano

    Domenico Delli Gatti

  2. DEA, Università di Ancona, Ancona

    Mauro Gallegati

Authors
  1. Domenico Delli Gatti
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  2. Mauro Gallegati
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Editor information

Editors and Affiliations

  1. Econometrics Department Nowy Sacz Graduate School of Business, National Louis University, 33-300 Nowy Sacz, ul. Zielona 27, Poland

    Jacek Leskow

  2. Department of Political Economy, UNISI, Piazza S. Francesco 7, 53100, Siena, Italy

    Lionello F. Punzo

  3. Economics Faculty, UNAM, Ciudad Universitaria, Av. Universidad 3000 Edif. de las Ofs. Admvas. 2, 1°, México D. F., 04510, Mexico

    Martín Puchet Anyul

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© 2005 Springer-Verlag Berlin Heidelberg

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Gatti, D.D., Gallegati, M. (2005). Structure and Macroeconomic Performance: Heterogeneous Firms and Financial Fragility. In: Leskow, J., Punzo, L.F., Anyul, M.P. (eds) New Tools of Economic Dynamics. Lecture Notes in Economics and Mathematical Systems, vol 551. Springer, Berlin, Heidelberg. https://doi.org/10.1007/3-540-28444-3_4

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