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On The Economic Interpretation Of The Br�Dy Conjecture

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  • Henryk Gurgul
  • Tomasz W�jtowicz

Abstract

The aim of the paper is to study the economic aspects of the Br�dy conjecture: an increase in the size of a (random) input matrix causes a decline in the ratio of its subdominant and dominant eigenvalues and implies faster convergence to equilibrium [Br�dy, A. (1997) The Second Eigenvalue of the Leontief Matrix. Economic Systems Research , 9, 253-258]. Simulation results provide evidence that this ratio depends inversely on the level of data aggregation and can therefore not be a good indicator of the speed of convergence of an economy to its equilibrium path. We show that this is consistent with findings based on actual input-output tables of EU member states. These results imply that theorems about the speed of convergence of random matrices are not useful in describing the cyclical dynamics of real economies.

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  • Henryk Gurgul & Tomasz W�jtowicz, 2015. "On The Economic Interpretation Of The Br�Dy Conjecture," Economic Systems Research, Taylor & Francis Journals, vol. 27(1), pages 122-131, March.
    • Handle: RePEc:taf:ecsysr:v:27:y:2015:i:1:p:122-131
    DOI: 10.1080/09535314.2014.979138
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    Cited by:

    1. Ferrer-Hernández , Jacobo & Torres-González, Luis Daniel, 2022. "Some Recent Developments on the Explanation of the Empirical Relationship between Prices and Distribution," Centro Sraffa Working Papers CSWP54, Centro di Ricerche e Documentazione "Piero Sraffa".
    2. Luis Daniel Torres Gonzalez, 2017. "Regularities in Prices of Production and the Concentration of Compositions of Capitals," Working Papers 1709, New School for Social Research, Department of Economics.
    3. Jacobo Ferrer-Hernández & Luis Daniel Torres-González, 2021. "Eigenvalues and Eigenlabors: On Iliadi’s, Mariolis’, Soklis’, and Tsoulfidis’ Explanation of the Empirical Regularities in Price Curves," Working Papers 2119, New School for Social Research, Department of Economics.
    4. Theodore Mariolis & Lefteris Tsoulfidis, 2018. "Less Is More: Capital Theory And Almost Irregular-Uncontrollable Actual Economies," Contributions to Political Economy, Oxford University Press, vol. 37(1), pages 65-88.
    5. Mariolis, Theodore & Tsoulfidis, Lefteris, 2016. "Capital theory: Less is more," MPRA Paper 75923, University Library of Munich, Germany.
    6. Anwar Shaikh & Luiza Nassif, 2018. "Eigenvalue distribution, matrix size and the linearity of wage-profit curves," Working Papers 1812, New School for Social Research, Department of Economics.
    7. Kemp-Benedict, Eric, 2018. "Investing in a Green Transition," Ecological Economics, Elsevier, vol. 153(C), pages 218-236.

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