Advanced Search
MyIDEAS: Login

A growth-cycle model of Solow-Swan type, I

Contents:

Author Info

  • Dohtani, Akitaka
Registered author(s):

    Abstract

    We construct an endogenous growth-cycle model of the Solow-Swan type. The equilibrium point of the growth-cycle model is the same as the steady state of the Solow-Swan growth model. Unlike in the Solow-Swan growth model, the representative household in the growth-cycle model, however, adaptively estimates his/her average income and determines his/her consumption in proportion to average income. We prove that if the steady state is unstable, any non-equilibrium path converges to a limit cycle. However, even if the steady state is stable, growth cycles can emerge. In fact, we prove that the growth-cycle model generates corridor stability. As a result, we prove that there exists an unstable cyclic path such that any path in the interior of the cyclic path converges to the steady state and any path in the exterior of the cyclic path tends toward a limit cycle (growth cycle). We also prove that a high economic growth rate is not compatible with a stable economy.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/B6V8F-50S2R39-1/2/9d24b229d58bc42883a406718a46de1e
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

    Volume (Year): 76 (2010)
    Issue (Month): 2 (November)
    Pages: 428-444

    as in new window
    Handle: RePEc:eee:jeborg:v:76:y:2010:i:2:p:428-444

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/jebo

    Related research

    Keywords: Solow-Swan growth model Growth cycles Consumption function Poincare-Bendixson Theorem Limit cycles Corridor stability Hopf bifurcation;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    2. Boldrin, Michele & Montrucchio, Luigi, 1986. "On the indeterminacy of capital accumulation paths," Journal of Economic Theory, Elsevier, vol. 40(1), pages 26-39, October.
    3. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
    4. Grasman, Johan & Wentzel, Jolanda J., 1994. "Co-existence of a limit cycle and an equilibrium in Kaldor's business cycle model and its consequences," Journal of Economic Behavior & Organization, Elsevier, vol. 24(3), pages 369-377, August.
    5. Kind, Christoph, 1999. "Remarks on the economic interpretation of Hopf bifurcations," Economics Letters, Elsevier, vol. 62(2), pages 147-154, February.
    6. Benhabib, Jess & Nishimura, Kazuo, 1979. "The hopf bifurcation and the existence and stability of closed orbits in multisector models of optimal economic growth," Journal of Economic Theory, Elsevier, vol. 21(3), pages 421-444, December.
    7. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6 National Bureau of Economic Research, Inc.
    8. Nishimura, Kazuo, 1985. "Competitive equilibrium cycles," Journal of Economic Theory, Elsevier, vol. 35(2), pages 284-306, August.
    9. Deneckere, Raymond & Pelikan, Steve, 1986. "Competitive chaos," Journal of Economic Theory, Elsevier, vol. 40(1), pages 13-25, October.
    10. Semmler, Willi & Sieveking, Malte, 1993. "Nonlinear liquidity-growth dynamics with corridor-stability," Journal of Economic Behavior & Organization, Elsevier, vol. 22(2), pages 189-208, October.
    11. Bohm, Volker & Kaas, Leo, 2000. "Differential savings, factor shares, and endogenous growth cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 24(5-7), pages 965-980, June.
    12. Day, Richard H, 1982. "Irregular Growth Cycles," American Economic Review, American Economic Association, vol. 72(3), pages 406-14, June.
    13. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
    14. Medio,Alfredo & Lines,Marji, 2001. "Nonlinear Dynamics," Cambridge Books, Cambridge University Press, number 9780521551861, December.
    15. Benhabib, Jess & Miyao, Takahiro, 1981. "Some New Results on the Dynamics of the Generalized Tobin Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(3), pages 589-96, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:jeborg:v:76:y:2010:i:2:p:428-444. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.