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Goodwin's models through viability analysis: some lights for contemporary political economics regulations

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Author Info
Hélène Clément-Pitiot () (CEMI-EHESS Paris)
Patrick Saint Pierre (LASTRE Paris)
Abstract

Our contribution aims to revisit the most famous Goodwin's models in macroeconomics by the light of set-valued analysis taking into account state and regulation constraints in a viability program. Goodwin 67 and Goodwin 90 models deal with dynamic interactions between employment and salary levels. They provide endogenous explanations of cyclical trends in dynamical economy. Viability methods enable investigating model properties and revealing appropriate regulation allowing the evolution to fulfill some prescribed qualitative objective. Then, applying computational methods derived from the Viability Kernel Algorithm, one can lash the traditional Goodwin model analysis up to the institutional framework of the economy including monetary and budgetary aspects of the regulatory policy from the public authorities, namely the state government, the central bank and eventually the rivalry between the two boards thanks to dynamical games and discriminant analysis

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Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2006 with number 100.

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Date of creation: 04 Jul 2006
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Handle: RePEc:sce:scecfa:100

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Keywords: viability out of equilibrium regulation

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  1. Jacek Krawczyk & Rishab Sethi, 2007. "Satisficing Solutions for New Zealand Monetary Policy," Reserve Bank of New Zealand Discussion Paper Series DP2007/03, Reserve Bank of New Zealand. [Downloadable!]
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