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A NONLINEAR BUSINESS CYCLE MODEL IN DISCRETE TIME
Author(s) -
Sen Kunal
Publication year - 1992
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.1992.tb00720.x
Subject(s) - aperiodic graph , economics , multiplier (economics) , business cycle , chaotic , nonlinear system , investment (military) , keynesian economics , macroeconomics , physics , mathematics , management , combinatorics , quantum mechanics , politics , political science , law
The paper develops a simple multiplier‐accelerator model of a market economy, where the strength of the accelerator relationship between current investment and past output depends on the state of the economy. It is found that the greater the values of the multiplier and the accelerator, the more persistent and aperiodic («chaotic») would be the cyclical behaviour of the economy.