IDEAS home Printed from https://ideas.repec.org/h/pal/palchp/978-1-349-11786-4_18.html
   My bibliography  Save this book chapter

A Real Growth Cycle with Adaptive Expectations

In: Profits, Deficits and Instability

Author

Listed:
  • Tzong-yau Lin
  • Wai-man Tse
  • Richard H. Day

Abstract

A real growth cycle model can be drawn up along neoclassical lines but based on adaptive expectations and temporary equilibrium instead of perfect foresight and intertemporal equilibrium as is done in most of the contemporary literature. Unlike the optimal growth version of the one sector model, which produces only monotonic growth that converges to a steady state or balanced growth path, in the adaptive case behaviour can, in addition to stable growth, exhibit periodic cycles or non-periodic, chaotic fluctuations. These various possibilities depend on the parameters of preference, productivity, expectational adjustment, the labour supply growth rate, the rate of technological advance and the rate of depreciation. When the model is viewed as a type of overlapping generations framework, cycles tend to look like 50-year Kondratieff fluctuations with one or two generations of increasing welfare followed by one or two generations that are relatively less well off.

Suggested Citation

  • Tzong-yau Lin & Wai-man Tse & Richard H. Day, 1992. "A Real Growth Cycle with Adaptive Expectations," Palgrave Macmillan Books, in: Profits, Deficits and Instability, chapter 18, pages 349-367, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-11786-4_18
    DOI: 10.1007/978-1-349-11786-4_18
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palchp:978-1-349-11786-4_18. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.