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Nonlinear Kaldor model augmented with retardation and anticipation

Author

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  • Akio Matsumoto

    (Chuo University)

  • Ferenc Szidarovszky

    (Corvinus University)

Abstract

In this paper, we introduce the delayed-advanced Kaldorian business cycle model and consider how time-delay and time-advance affect economic fluctuations. Given the asymptotic stability of the original Kaldor model, we first show that an approximated Kaldor model by a Taylor series expansion can accurately describe the dynamics of the delayed Kaldor model. We also confirm that the delay has a destabilizing effect. When time-delay is replaced with time-advance, we have an advanced Kaldor model. Taking the advanced capital stock formulation, we derive the stability conditions and find that the time-advance has a stabilizing effect. Lastly, we examine these opposite-signed effects in a modified delayed-advanced model.

Suggested Citation

  • Akio Matsumoto & Ferenc Szidarovszky, 2024. "Nonlinear Kaldor model augmented with retardation and anticipation," Annals of Operations Research, Springer, vol. 337(3), pages 937-958, June.
    • Handle: RePEc:spr:annopr:v:337:y:2024:i:3:d:10.1007_s10479-023-05415-1
    DOI: 10.1007/s10479-023-05415-1
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    References listed on IDEAS

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    6. A. Krawiec & M. Szydlowski, 1999. "The Kaldor‐Kalecki business cycle model," Annals of Operations Research, Springer, vol. 89(0), pages 89-100, January.
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