Neo-keynesian and Neo-classical Macroeconomic Models: Stability and Lyapunov Exponents
Neo-keynesian and Neo-classical Macroeconomic Models: Stability and Lyapunov Exponents
Author(s): Jan Kodera, Miloslav S. Vošvrda, Karel SladkýSubject(s): Economy
Published by: Univerzita Karlova v Praze - Institut ekonomických studií
Keywords: macroeconomic models; Keynesian and Classical model; non-linear differential equations; linearization; asymptotical stability; Lyapunov exponents
Summary/Abstract: The non-linear approach to economic dynamics enables us to study traditional economic models using modified formulations and different methods of solution. In this article we compare the dynamic properties of the Keynesian and Classical macroeconomic models. We start with an extended dynamic IS-LM neoclassical model generating the behavior of the real product, the interest rate, expected inflation, and the price level over time. Limiting behavior, stability, and the existence of limit cycles and other specific features of these models will be compared.
Journal: Czech Economic Review
- Issue Year: 1/2007
- Issue No: 03
- Page Range: 302-311
- Page Count: 10
- Language: English
