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Stability of the adjustment process with the difference between the weighted average and the actual value

Author

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  • Takeshi Ogawa

    (Nagoya University)

Abstract

In this paper, we show a similar concept of stability of the adjustment process concerning the difference between the weighted average and the actual value. Because the adjustment process includes only one eigenvalue of zero, and thus one dimension of freedom, it is difficult to apply the Routh-Hurwitz theorem to the process, at least directly. To solve the one-dimensional freedom, we fully apply Goodwin's analysis of the weighted average. One-dimensional freedom is suitable for indeterminacy issues, or the characterization of price and the like, which has only relative value and no absolute value. From this analysis, we know that it is reasonable to be concerned about the difference between the average and the actual value.

Suggested Citation

  • Takeshi Ogawa, 2010. "Stability of the adjustment process with the difference between the weighted average and the actual value," Economics Bulletin, AccessEcon, vol. 30(4), pages 3010-3017.
    • Handle: RePEc:ebl:ecbull:eb-10-00184
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    More about this item

    Keywords

    Linear approximation system; Weighted average; Hicksian matrix; Linear approximation stable except choosing the absolute value;
    All these keywords.

    JEL classification:

    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

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