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A Multisectoral Micro-Macrodynamic Model

Author

Listed:
  • Mário Luiz Possas

    (Economics Institute, Universidade Federal do Rio de Janeiro)

  • Esther Dweck

Abstract

This is a simulation model that intends to integrate macro dynamics with structural and sectoral features that shape and modify it. It is an attempt to analyze the macrodynamic effective demand effects of endogenous structural changes in the same setup. Micro-macro interactions result in the model from each level having its own dynamics dependent on the inputs it receives from the others. Each sector is modeled according to neo-Schumpeterian evolutionary microfoundations, with additional unorthodox micro behavioral assumptions. Together with exogenous foreign and government sectors, they are integrated into a multisectoral model. The main features of the model are: (1) simulated sectoral trajectories of a stylized economy derive from endogenous competitive dynamics as well as direct (input-output) and indirect (income, consumption) interactions; (2) sectors are distinguished according to their role in the productive structure and demand categories – consumption, intermediate and capital; (3) no equilibrium is assumed: dynamic interactions among firms’ decisions (based on adaptive expectations) and their effects generate open-ended trajectories. Even though the simulation results presented in this paper only give a very brief idea of the trajectories generated by the model, a general robust result is obtained: the cyclical behavior of the GDP and its main aggregate components.

Suggested Citation

  • Mário Luiz Possas & Esther Dweck, 2005. "A Multisectoral Micro-Macrodynamic Model," Working Papers 0012, Universidade Federal do Paraná, Department of Economics.
  • Handle: RePEc:fup:wpaper:0012
    Note: Creation Date corresponds to the year in which the paper was published on the Department of Economics website. The paper may have been written a small number of months before its publication date.
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    References listed on IDEAS

    as
    1. Patrick Llerena & André Lorentz, 2003. "Alternative Theories on Economic Growth and the Co-evolution of Macro-Dynamics and Technological Change: A survey," LEM Papers Series 2003/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    2. Heiner, Ronald A, 1983. "The Origin of Predictable Behavior," American Economic Review, American Economic Association, vol. 73(4), pages 560-595, September.
    3. Bart Verspagen, . "Evolutionary macroeconomics: A synthesis between neo-Schumpeterian and post-Keynesian lines of thought," The Electronic Journal of Evolutionary Modeling and Economic Dynamics, IFReDE - Université Montesquieu Bordeaux IV.
    4. Dosi, G & Egidi, M, 1991. "Substantive and Procedural Uncertainty: An Exploration of Economic Behaviours in Changing Environments," Journal of Evolutionary Economics, Springer, vol. 1(2), pages 145-168, April.
    5. Vercelli,Allessandro, 1991. "Methodological Foundations of Macroeconomics," Cambridge Books, Cambridge University Press, number 9780521392945, May.
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    More about this item

    Keywords

    Multisectoral growth models;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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