Business Fluctuations and Long-Phased Cycles in High Order Macrosystems

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Carl Chiarella, "Business Fluctuations and Long-Phased Cycles in High Order Macrosystems"
English | ISBN: 160456654X | 2008 | 97 pages | PDF | 4 MB
In this book the authors investigate, from the numerical perspective, the 18D core dynamics of a theoretical 39D representation of an applied Keynesian disequilibrium model of monetary growth of a small open economy. After considering the model from the viewpoint of national accounting, the authors provide a compact description of the intensive form of the model, its laws of motion and accompanying algebraic expressions and its unique interior steady state solution. The authors then give a survey of various types of subsystems that can be isolated from the integrated 18D dynamics by means of suitable assumptions. These subsystems and the full 18D dynamics are investigated and compared in the remainder of the paper from the perspective of bifurcation diagrams that separate situations of asymptotic stability from stable cyclical behaviour as well as pure explosiveness. In this way the authors lay the foundations for an analysis of business cycle fluctuations in applicable high order macrosystems, which will show, in contrast to what is generally believed to characterise such structural macroeconometric models, that applied integrated macrodynamical systems can have a variety of interesting more or less complex attractors which are surrounded by more or less long-phase transient behaviour. Such attractors are obtained in particular when locally explosive situations are turned into bounded dynamics by the addition of specifically tailored extrinsic behavioural non-linearities. The authors establish a Keynesian theory of endogenously generated business cycles where turning points are caused by globally non-linear behaviour, rather than by complex eigenvalues, around the steady state position of the economy.

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