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Defining and Modeling State-Dependent Dynamic Systems

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  • Esarey, Justin
  • DeMeritt, Jacqueline H. R.

Abstract

A state-dependent dynamic system is one in which (1) the marginal effect of x on y at time t () depends on the prior value of the dependent variable , and (2) the persistence of the dependent variable () depends on xt . We present a methodological strategy for dealing with state-dependent dynamic systems and demonstrate the consequences of ignoring state-dependence. As an applied example, we find evidence of state-dependence in the relationship between presidential approval and economic performance: high unemployment rates are most damaging to presidential approval among presidents with the highest initial approval ratings.

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  • Esarey, Justin & DeMeritt, Jacqueline H. R., 2014. "Defining and Modeling State-Dependent Dynamic Systems," Political Analysis, Cambridge University Press, vol. 22(1), pages 61-85, January.
    • Handle: RePEc:cup:polals:v:22:y:2014:i:01:p:61-85_01
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    Cited by:

    1. Jones, Sam & Tarp, Finn, 2016. "Does foreign aid harm political institutions?," Journal of Development Economics, Elsevier, vol. 118(C), pages 266-281.
    2. Jones, Sam & Tarp, Finn, 2016. "Does foreign aid harm political institutions?," Journal of Development Economics, Elsevier, vol. 118(C), pages 266-281.
    3. Xing, Xiaoyun & Xiong, Wanting & Guo, Jinzhong & Wang, Yougui, 2021. "The role of debt in aggregate demand," Finance Research Letters, Elsevier, vol. 39(C).
    4. Justin Esarey & Jacqueline H. R. DeMeritt, 2017. "Political Context and the Consequences of Naming and Shaming for Human Rights Abuse," International Interactions, Taylor & Francis Journals, vol. 43(4), pages 589-618, July.

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