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A chaotic process with slow feed back: The case of business cycles

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Economic Evolution and Demographic Change

Part of the book series: Lecture Notes in Economics and Mathematical Systems ((LNE,volume 395))

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Abstract

The original multiplier-accelerator model for business cycles, proposed by Samuelson (1939), used three relations. Capital stock was assumed proportional to income. Investments I t = v(Y t −1 − Y t −1), by definition the change of capital stock, thus became proportional to the change of income. Consumption, C t = (1 − s)Y t−1 , was assumed proportional to income, a given fraction being saved. Finally, income was generated by consumption and investments: Y t = C t + I t . Substituting for consumption and investments a very simple recursive relation of the second order was obtained: Y t = (1 + v − s)Y t −1 − vY t −2.

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References

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Author information

Authors and Affiliations

  1. Department of Economics, University of Umeå, Umeå, Sweden

    Tönu Puu

Authors
  1. Tönu Puu
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Editors and Affiliations

  1. II. Institut f. Theoretische Physik, Universität Stuttgart, W-7000, Stuttgart, Germany

    Günter Haag

  2. Zentrum für Umfragen, Methoden und Analysen (ZUMA), B2, 1, W-6800, Mannheim, Germany

    Ulrich Mueller

  3. Institut für Sozialwissenschaftliche Informatik, Universität Koblenz-Landau, Rheinau 3-4, W-5400, Koblenz, Germany

    Klaus G. Troitzsch

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© 1992 Springer-Verlag Berlin Heidelberg

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Puu, T. (1992). A chaotic process with slow feed back: The case of business cycles. In: Haag, G., Mueller, U., Troitzsch, K.G. (eds) Economic Evolution and Demographic Change. Lecture Notes in Economics and Mathematical Systems, vol 395. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-48808-5_1

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  • DOI: https://doi.org/10.1007/978-3-642-48808-5_1

  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-540-56172-9

  • Online ISBN: 978-3-642-48808-5

  • eBook Packages: Springer Book Archive

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