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Growth and stability in a model with Pasinettian saving behaviour and neoclassical technology
Author(s) -
Faria João Ricardo,
Teixeira Joanílio Rodolpho
Publication year - 1999
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/1467-9957.00135
Subject(s) - economics , ricardian equivalence , stability (learning theory) , equivalence (formal languages) , income distribution , distribution (mathematics) , growth model , debt , mathematical economics , simple (philosophy) , econometrics , dual (grammatical number) , neoclassical economics , keynesian economics , macroeconomics , mathematics , inequality , computer science , mathematical analysis , art , philosophy , literature , epistemology , discrete mathematics , machine learning
We analyse a Kaldor–Pasinetti two‐class model of growth and distribution in which fiscal activity is explicitly introduced along the lines of Pasinetti (‘Ricardian Debt/Taxation Equivalence in the Kaldor Theory of Profits and Income Distribution’, Cambridge Journal of Economics , Vol. 13 (1989), pp. 25–36). Following the approach of Darity (‘A Simple Analytics of Neo‐Ricardian Growth and Distribution’, American Economic Review , Vol. 71 (1981), pp. 978–993) the model is reduced to a dynamic system where the Cambridge equation is one of the possible steady‐state solutions. The conditions for its local stability are studied and a numerical example is presented. The anti‐dual case is more likely to occur in order to guarantee the local stability of the Cambridge equation.