Non-linear models: applications in economics
AbstractThe study concentrated on demonstrating how non-linear modelling can be useful to investigate the behavioural of dynamic economic systems. Using some adequate non-linear models could be a good way to find more refined solutions to actually unsolved problems or ambiguities in economics. Beginning with a short presentation of the simplest non-linear models, then we are demonstrating how the dynamics of complex systems, as the economic system is, could be explained on the base of some more advanced non-linear models and using specific techniques of simulation. We are considering the non-linear models only as an alternative to the stochastic linear models in economics. The conventional explanations of the behaviour of economic system contradict many times the empirical evidence. We are trying to demonstrate that small modifications in the standard linear form of some economic models make more complex and consequently more realistic the behaviour of system simulated on the base of the new non-linear models. Finally, few applications of non-linear models to the study of inflation-unemployment relationship, potentially useful for further empirical studies, are presented.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 3100.
Date of creation: 2006
Date of revision:
non-linear model; continuous time map; strange attractor; fractal dimension; natural unemployment;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-12 (All new papers)
- NEP-ETS-2007-05-12 (Econometric Time Series)
- NEP-MAC-2007-05-12 (Macroeconomics)
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