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Using Perturbation Methods in the Model of Technological Change

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  • Matjaz Steinbacher

    ()
    (Economic Department Free Society Institute)

Abstract

The article examines the stability of the steady state in a perfect foresight model of technological change using perturbation methods. In the models of technological change analyses were generally restricted to find a steady state but they lack to test for its stability. Perturbation methods provide very powerful tool for analyzing local approximations and are easy to compute. Its basic idea is very simple. After finding a steady state of the problem this information is taken as a starting point for computing approximate solutions to nearby problems. We observe how small perturbations of the model produce variations from the steady state growth rate

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Bibliographic Info

Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2006 with number 295.

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Date of creation: 04 Jul 2006
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Handle: RePEc:sce:scecfa:295

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