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Investment limit cycles in a socialist economy

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Abstract

The present paper generalizes a linear cycle model of the socialist economy studied in Simonovits (1990): the two equations describing the reproduction of the tensions are retained, while the two linear reaction equations are confined to the interval of lower and upper bounds; outside these intervals the decisions are given by the corresponding bounds (cf. Hicks, 1950).

The main result is the following: If a certain linear system of equations and inequalities has a solution, then there exists a limit cycle with period 4, the amplitude of which is independent of the initial states.

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Authors and Affiliations

  1. Institute of Economics, Hungarian Academy of Sciences, Budapest, Hungary

    A. Simonovits

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  1. A. Simonovits
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Simonovits, A. Investment limit cycles in a socialist economy. Economics of Planning 24, 27–46 (1991). https://doi.org/10.1007/BF00361113

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  • DOI: https://doi.org/10.1007/BF00361113

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