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Second Order Dynamics Of Economic Cycles

Author

Listed:
  • Purica, Ionut

    () (Institute for Economic Forecasting, Romanian Academy)

  • Caraiani, Petre

    () (Institute for Economic Forecasting, Romanian Academy)

Abstract

The monthly data of the industrial production in Romania after the structural discontinuity occurring at the end of 1989 show an under-damped oscillatory behavior that suggests an evolution of second order systems excited by a step function. Since this behavior is well described in control systems we are doing what the literature usually calls a reversed engineering of the data in order to identify the specific parameters for the economic cycle of industrial production. The final goal is to determine the second order differential equation that may be associated to the economic process related to industrial production evolution. This paper is a first contribution that opens an alternative approach to describe the economic dynamics.

Suggested Citation

  • Purica, Ionut & Caraiani, Petre, 2009. "Second Order Dynamics Of Economic Cycles," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 6(1), pages 36-47, March.
  • Handle: RePEc:rjr:romjef:v:6:y:2009:i:1:p:36-47
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    References listed on IDEAS

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    1. Dobrescu, Emilian, 2011. "Sectoral Structure and Economic Growth," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 5-36, September.
    2. Giovagnoli, A. & Wynn, H.P., 2008. "Stochastic orderings for discrete random variables," Statistics & Probability Letters, Elsevier, vol. 78(16), pages 2827-2835, November.
    3. Dobrescu, Emilian, 2013. "Restatement of the I-O Coefficient Stability Problem," Working Papers of Macroeconomic Modelling Seminar 132601, Institute for Economic Forecasting.
    4. Tülin Erdem, 1996. "A Dynamic Analysis of Market Structure Based on Panel Data," Marketing Science, INFORMS, vol. 15(4), pages 359-378.
    5. A. B. Atkinson & F. Bourguignon, 1982. "The Comparison of Multi-Dimensioned Distributions of Economic Status," Review of Economic Studies, Oxford University Press, vol. 49(2), pages 183-201.
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    Citations

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    Cited by:

    1. Caraiani, Petre, 2010. "Modeling Business Cycles In The Romanian Economy Using The Markov Switching Approach," Journal for Economic Forecasting, Institute for Economic Forecasting, pages 130-136.
    2. Caraiani, Petre, 2012. "Is the Romanian Business Cycle Characterized by Chaos?," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 142-151, September.
    3. Purica, Ionut, 2010. "Nonlinear Considerations on Economic Systems’ Behaviour," Journal for Economic Forecasting, Institute for Economic Forecasting, pages 74-81.
    4. Iancu, Aurel, 2011. "Financial System Fragility Models," Working Papers of National Institute of Economic Research 110211, National Institute of Economic Research.
    5. Purica, Ionut, 2012. "Oscillatory Dynamics of Industrial Production," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 117-128, December.
    6. Andrei Silviu DOSPINESCU, 2012. "The Behavior Of Prices As A Response To Structural Changes - The Role Of The Economic Transmission Mechanisms In Explaining The Observed Behavior," Romanian Journal of Economics, Institute of National Economy, vol. 35(2(44)), pages 201-217, December.
    7. Cristi SPULBAR & Mihai NITOI & Cristian STANCIU, 2012. "Identifying The Industry Business Cycle Using The Markov Switching Approach In Central And Eastern Europe," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(2), pages 293-300, November.
    8. Iancu, Aurel, 2011. "Models of Financial System Fragility," Journal for Economic Forecasting, Institute for Economic Forecasting, pages 230-256.

    More about this item

    Keywords

    business cycles; simulations; nonlinear methods; transition economies; mathematical methods;

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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