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Finding an Example of an Optimising Agent with Cyclical Behaviour

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  • Peter J. Stemp

Abstract

Most recent studies of dynamic macroeconomic relationships focus on models derived from optimising behaviour by economic agents. In most of these models, the eigenvalues of the associated dynamical system are real-valued and so the time-path of the system exhibits monotonic or near-monotonic behaviour. While, it is well-known that linear dynamic models with complex-valued eigenvalues exhibit the property of oscillatory dynamic behaviour, limited research has been undertaken to investigate the properties of optimising models with oscillatory behaviour. In this study, we will focus on producing an example of an optimising agent whose dynamics are characterised by complex-valued eigenvalues and who thus exhibits cyclical behaviour.

Suggested Citation

  • Peter J. Stemp, 2005. "Finding an Example of an Optimising Agent with Cyclical Behaviour," Computing in Economics and Finance 2005 4, Society for Computational Economics.
    • Handle: RePEc:sce:scecf5:4
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    File URL: http://www.economics.unimelb.edu.au/subject_pages/staff/pstemp/stemppaper.pdf
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    References listed on IDEAS

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    1. Stephen J. Turnovsky, 2000. "Methods of Macroeconomic Dynamics, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262201232, December.
    2. Léonard,Daniel & Long,Ngo van, 1992. "Optimal Control Theory and Static Optimization in Economics," Cambridge Books, Cambridge University Press, number 9780521331586, January.
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    Cited by:

    1. Stemp, Peter J. & Herbert, Ric D., 2008. "Comparing different approaches for solving optimizing models with significant nonlinearities," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 78(2), pages 357-366.
    2. Peter Stemp & Ric Herbert, 2006. "Solving Non-Linear Models with Saddle-Path Instabilities," Computational Economics, Springer;Society for Computational Economics, vol. 28(2), pages 211-231, September.

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    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications

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