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Stability of Growth Models with Generalised Lag Structures

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Abstract

This paper considers the lag structures of dynamic models in economics, arguing that the standard approach is too simple to capture the complexity of actual lag structures arising, for example, from production and investment decisions. It is argued that recent (1990s) developments in the theory of functional differential equations provide a means to analyse models with generalised lag structures. The stability and asymptotic stability of two growth models with generalised lag structures are analysed. The paper concludes with some speculative discussion of time-varying parameters.

Suggested Citation

  • Donald A R George, 2011. "Stability of Growth Models with Generalised Lag Structures," Edinburgh School of Economics Discussion Paper Series 205, Edinburgh School of Economics, University of Edinburgh.
    • Handle: RePEc:edn:esedps:205
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    1. Donald A. R. George & Les Oxley & Ken Carlaw, 2003. "Economic Growth in Transition," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 227-237, July.
    2. William C. Wheaton, 1987. "The Cyclic Behavior of the National Office Market," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 15(4), pages 281-299, December.
    3. Majd, Saman & Pindyck, Robert S., 1987. "Time to build, option value, and investment decisions," Journal of Financial Economics, Elsevier, vol. 18(1), pages 7-27, March.
    4. Tiago Neves Sequeira, 2008. "Transitional Dynamics Of An Endogenous Growth Model With An Erosion Effect," Manchester School, University of Manchester, vol. 76(4), pages 436-452, July.
    5. Pindyck, Robert S, 1991. "Irreversibility, Uncertainty, and Investment," Journal of Economic Literature, American Economic Association, vol. 29(3), pages 1110-1148, September.
    6. Dajin Li, 2002. "Is the AK model still alive? The long-run relation between growth and investment re-examined," Canadian Journal of Economics, Canadian Economics Association, vol. 35(1), pages 92-114, February.
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