IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/87204.html
   My bibliography  Save this paper

The Business Cycle Model Beyond General Equilibrium

Author

Listed:
  • Olkhov, Victor

Abstract

This paper presents the business cycle model without using assumptions of general equilibrium. We use agent-based models, risk assessments and economic space as ground for modelling business cycles. All economic agents are at risk but not for all agents risk assessments are performed. We propose that for each agent risk assessment can be performed and suggest treat risk ratings x of agents as their coordinate x on economic space. Agents fill economic domain bounded by most secure and most risky agents. Economic processes, exogenous or endogenous shocks induce evolution of agent’s risk coordinates. We show how risk motions of agents on the bounded economic domain induce the business cycle. We derive the system of economic equations that describe macroeconomic evolution and the business cycle on economic space. As example, we study simple model that describe relations between macro Assets A(t,x) and Revenue-on-Assets B(t,x). To show how economic equations describe the business cycle we obtain from them the system of ordinary differential equations that describes business cycle time fluctuations of macroeconomic Assets A(t) and Revenue-on-Assets B(t).

Suggested Citation

  • Olkhov, Victor, 2018. "The Business Cycle Model Beyond General Equilibrium," MPRA Paper 87204, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:87204
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/87204/1/MPRA_paper_87204.pdf
    File Function: original version
    Download Restriction: no

    More about this item

    Keywords

    Business cycle; Agent-Based Models; Risk Assessment; Economic Space;

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:87204. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.