Persistent disequilibrium dynamics and economic policy
We develop a theoretical model involving temporary equilibria with quantity rationing in each period and price adjustment between periods. The resulting dynamic system may present a variety of dynamic behaviors, ranging from the convergence to stationary or quasi-stationary states, to complex or even chaotic dynamics. In particular, our framework has the property of being able to endogenously allow for the characterization of persistent disequilibrium phenomena — such us unemployment or deflation. It provides therefore for an ideal setup to investigate the effects and persistency of recessionary phases, and to study the effectiveness of different economic policies aimed at resolving them.
|Length:||nn pages 25|
|Date of creation:||Mar 2009|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.unicatt.it/Istituti/EconomiaFinanza|
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