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Business Cycles, Growth, And Imported Energy In A Small-Open Growth Model

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  • Wei-Bin Zhang

    (Ritsumeikan Asia Pacific University, Japan)

Abstract

This paper generalizes an economic growth model proposed by Zhang (2017) by allowing all constant coefficients to be time-dependent. This paper shows existence of business cycles in the generalized model due to periodic shocks. Zhang’s original model is developed for a small open economy with imported energy and imported goods. The economy is composed of two sectors and all markets are perfectly competitive. The economy has fixed land and population. Production side is the same as in neoclassical growth theory, while demand side is modelling with Zhang’s utility and concept of disposable income. We generalize and simulate the model. We demonstrate existence of business cycles due to different exogenous periodic shocks.

Suggested Citation

  • Wei-Bin Zhang, 2018. "Business Cycles, Growth, And Imported Energy In A Small-Open Growth Model," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 3(2), pages 7-21, September.
    • Handle: RePEc:ora:jrojbe:v:3:y:2018:i:2:p:7-21
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    References listed on IDEAS

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    More about this item

    Keywords

    business cycles; price of energy; price of imported goods; land distribution; propensity to save; small open economy.;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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