Summary
This chapter considers Harrod’s knife-edge instability, which implies severe and extreme business cycles restricted by a full employment ceiling and a zero-gross-investment floor. We construct a dynamic model with imperfect competition in the output market by using the subjective-demand curve approach. In addition, we consider technical choice by taking account of the putty-clay technology. The chapter shows the occurrence of endogenous and moderate fluctuations through the Hopf bifurcation.
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Yoshida, H. (2007). Harrodian Dynamics Under Imperfect Competition: A Growth-Cycle Model. In: Asada, T., Ishikawa, T. (eds) Time and Space in Economics. Springer, Tokyo. https://doi.org/10.1007/978-4-431-45978-1_2
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DOI: https://doi.org/10.1007/978-4-431-45978-1_2
Publisher Name: Springer, Tokyo
Print ISBN: 978-4-431-45977-4
Online ISBN: 978-4-431-45978-1
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