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Estimating a modified nonlinear Hicks model: Evidence from the US economy (1960-2008)

Author

Listed:
  • Michaelides, Panayotis G.
  • Belegri-Roboli, Athena
  • Arapis, Gerasimos

Abstract

This paper presents a modified nonlinear Hicks model of the cycle and a method for deriving estimators based on Nonlinear Least Squares and other relevant criteria. Hicks thought that fluctuations in investment, caused by nonlinear changes in autonomous investment and the acceleration principle governing induced investment, led to an adjustment process taking place throughout many periods. An empirical application for the US economy (1960-2008) demonstrates the almost ideal performance of the modified model and the proposed method.

Suggested Citation

  • Michaelides, Panayotis G. & Belegri-Roboli, Athena & Arapis, Gerasimos, 2010. "Estimating a modified nonlinear Hicks model: Evidence from the US economy (1960-2008)," MPRA Paper 74461, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:74461
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    References listed on IDEAS

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    1. J. Barkley Rosser, 1999. "On the Complexities of Complex Economic Dynamics," Journal of Economic Perspectives, American Economic Association, vol. 13(4), pages 169-192, Fall.
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    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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