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Qualitative Analysis of the Goodwin Model of the Growth Cycle || Análisis cualitativo del modelo de Goodwin de ciclos de crecimiento

Author

Listed:
  • Serebriakov, Vladimir

    (Department of Economics, Faculty of Business and Management. Brno University of Technology (Czech Republic))

  • Dohnal, Mirko

    (Department of Economics, Faculty of Business and Management. Brno University of Technology (Czech Republic))

Abstract

Goodwin's model is a set of ordinary differential equations and is a well-known model of the growth cycle. However, its four constants require an extensive numerical study of its two differential equations to identify all possible unsteady state behaviors, i.e. phase portraits, which corresponds to infinitely many combinations of numerical values of the constants. Qualitative interpretation of Goodwin's model solves these problems by replacing all numerical constants and all derivatives by trends (increasing, constant and decreasing). The model has two variables - the employment rate V, and the labour share U. A solution of the qualitative Goodwin's model is a scenario. An example of a Goodwin's scenario is - V is increasing more and more rapidly, U is decreasing and the decrease is slowing down. The complete set of all possible 41 Goodwin's scenarios and 168 time transitions among them are given. This result qualitatively represents all possible unsteady state Goodwin's behaviours. It is therefore possible to predict all possible future behaviours if a current behaviour is known/chosen. A prediction example is presented in details. No prior knowledge of qualitative model theory is required. || El modelo de Goodwin es un conjunto de ecuaciones diferenciales ordinarias y resulta un modelo bien conocido para ciclos de crecimiento. Sin embargo, sus cuatro constantes requieren de un extenso estudio numérico de sus dos ecuaciones diferenciales para identificar todos los posibles comportamientos de estado no estacionario, i.e. retratos de fase, que corresponden a infinitamente muchas combinaciones de valores numéricos de las constantes. La interpretación cualitativa del modelo de Goodwin resuelve estos problemas reemplazando todas las constantes numéricas y todas las derivadas por tendencias (creciente, constante y decreciente). El modelo consiste en dos variables: la tasa de empleabilidad V y la repartición del valor agregado U. Una solución del modelo cualitativo de Goodwin es un escenario. Un ejemplo de escenario de Goodwin es el siguiente: V es creciente cada vez más rápidamente y U es decreciente pero el decrecimiento se está ralentizando. Se obtiene el conjunto completo de los 41 escenarios posibles de Goodwing con las 168 transiciones temporales entre ellas. Este resultado representa cualitativamente todos los posibles comportamientos de estado no estacionario de Goodwin. Por tanto, es posible predecir todos los comportamientos futuros posibles si un comportamiento actual es conocido o elegido. Un ejemplo de predicción es presentado en detalle. No se requiere ningún conocimiento previo de la teoría de modelos cualitativos.

Suggested Citation

  • Serebriakov, Vladimir & Dohnal, Mirko, 2017. "Qualitative Analysis of the Goodwin Model of the Growth Cycle || Análisis cualitativo del modelo de Goodwin de ciclos de crecimiento," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 23(1), pages 223-233, Junio.
  • Handle: RePEc:pab:rmcpee:v:23:y:2017:i:1:p:223-233
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    More about this item

    Keywords

    Goodwin model; business cycle; qualitative; scenario; transition; modelo de Goodwin; ciclo empresarial; cualitativo; escenario; transición;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications

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