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Time-to-Build and Cycles

Author

Listed:
  • Patrick Asea

    (UCLA & NBER)

  • Paul J. Zak

    (Claremont Graduate School)

Abstract

We analyze the dynamics of a simple growth model in which production occurs with a delay while new capital is installed (time-to-build). The time-to-build technology is shown to yield a system of functional (delay) differential equations with a unique steady state. We demonstrate that the steady state, though typically a saddle, may exhibit Hopf cycles on a measurable set of the parameter space. Furthermore, the optimal path to the steady state is oscillatory. A counter-example to the claim that intrinsically oscillatory on the central technical apparatus the mathematics of functional differential equations.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Patrick Asea & Paul J. Zak, 1997. "Time-to-Build and Cycles," UCLA Economics Working Papers 767, UCLA Department of Economics.
  • Handle: RePEc:cla:uclawp:767
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    File URL: http://www.econ.ucla.edu/workingpapers/wp767.pdf
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    References listed on IDEAS

    as
    1. Boldrin, Michele & Woodford, Michael, 1990. "Equilibrium models displaying endogenous fluctuations and chaos : A survey," Journal of Monetary Economics, Elsevier, vol. 25(2), pages 189-222, March.
    2. Nishimura Kazuo & Sorger Gerhard, 1996. "Optimal Cycles and Chaos: A Survey," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 1(1), pages 1-20, April.
    3. Ioannides, Yannis M. & Taub, Bart, 1992. "On dynamics with time-to-build investment technology and non-time-separable leisure," Journal of Economic Dynamics and Control, Elsevier, vol. 16(2), pages 225-241, April.
    4. Reichlin Pietro, 1997. "Endogenous Cycles in Competitive Models: An Overview," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 1(4), pages 1-13, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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