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Convergence, cycles and complex dynamics of financing investment

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  • Datta, Soumya

Abstract

This paper demonstrates the diverse dynamical possibilities of a simple macroeconomic model of debt-financed investment-led growth in the presence of interest rate rules. We show possibilities of convergence to steady state, growth cycles around it as well as various complex dynamics from codim 1 and codim 2 bifurcations. The effectiveness of monetary policy in the form of interest rate rules is examined under this context.

Suggested Citation

  • Datta, Soumya, 2013. "Convergence, cycles and complex dynamics of financing investment," MPRA Paper 52111, University Library of Munich, Germany, revised 10 Dec 2013.
    • Handle: RePEc:pra:mprapa:52111
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    References listed on IDEAS

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    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C69 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Other
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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