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The Z -transform method for multidimensional dynamic economic systems

Author

Listed:
  • Xiaoyong Cui
  • Liutang Gong
  • Xiaojun Zhao
  • Heng-fu Zou

Abstract

This article uses the Z -transform to develop a method for solving the linearised multidimensional discrete-time systems, which can be used to discuss the effects of policies on economy (including the welfare gains and initial effects on economy) raised by multi-sector perfect-foresight-discrete-time models. Our method is not restricted to the dimension of the dynamic system, and it can not only analyse the effect of permanent policy change on the economy but also can be used to analyse the effect of temporal policy change on the economy. As an application example, we analyse the effects of fiscal policy on the initial economy and social welfare in the discrete-time Uzawa--Lucas model.

Suggested Citation

  • Xiaoyong Cui & Liutang Gong & Xiaojun Zhao & Heng-fu Zou, 2013. "The Z -transform method for multidimensional dynamic economic systems," Applied Economics Letters, Taylor & Francis Journals, vol. 20(11), pages 1081-1088, July.
  • Handle: RePEc:taf:apeclt:v:20:y:2013:i:11:p:1081-1088
    DOI: 10.1080/13504851.2013.787156
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    More about this item

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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