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Experimenting with Dynamic Macromodels

Growth and Cycles

  • Pier Carlo Nicola

Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 608)

Table of contents

  1. Front Matter
    Pages I-XIV
  2. Basics

  3. Simple Dynamic Macromodels

  4. Computer Simulations

  5. Back Matter
    Pages 253-268

About this book

Introduction

This book presents a macroeconomic dynamic model à la Solow-Swan, including the market for labour, in a discrete time structure. Labour supply is modelled as a reversed S curve (derived in the appendix). The models are expanded to include expenditure on R&D (thus endogenous technical progress), and public expenditure on infrastructures.

For each of the three models, numerical simulations are implemented in MAPLE, and the results are shown in time series figures, which make it easy to detect that even small changes in the parameters produce responses in the time behaviour of the main variables: from steady growth, to regular cycles, to chaotic-like time paths.

The simulations show that cycles do not promote material welfare, as measured by total undiscounted consumption along the time horizon, and that the comparative action of R&D versus public expenditure is strictly linked to the values assigned to the parameters.

Keywords

Cycles Forschung & Entwicklung Growth Macroeconomics R & D Simulation Simulations production

Authors and affiliations

  • Pier Carlo Nicola
    • 1
  1. 1.Department of MathematicsUniversity of MilanoMilanItaly

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-540-77397-9
  • Copyright Information Springer-Verlag 2008
  • Publisher Name Springer, Berlin, Heidelberg
  • eBook Packages Business and Economics
  • Print ISBN 978-3-540-77396-2
  • Online ISBN 978-3-540-77397-9
  • Series Print ISSN 0075-8442
  • Buy this book on publisher's site