Delay differential neoclassical growth model
Abstract This paper develops a continuous-time neoclassical growth model with time delay. Despite of its simple structure, the resulting dynamic system shows emergence of erratic fluctuations in the capital accumulation process when the production function is unimodal and the delay in production is explicitly considered. It complements the seminal paper of Day (1982) in which a discrete-time neoclassical growth model displayed chaotic behavior for some configurations of the propensity to save, the growth rate of labor and the capital depreciation rate. Our analysis has at least two implications. First, nonlinearities and delay matter for a birth of aperiodic fluctuations of national product in the continuous-time model. Second, comparing the effects caused by two different time delays, fixed and continuously distributed time delays, reveals that the continuous-time model with the former can generate complex fluctuations while the one with the latter generates simple fluctuations when the shape parameter of the density function is small and complex fluctuations when large.
Year of publication: |
2011
|
---|---|
Authors: | Matsumoto, Akio ; Szidarovszky, Ferenc |
Published in: |
Journal of Economic Behavior & Organization. - Elsevier, ISSN 0167-2681. - Vol. 78.2011, 3, p. 272-289
|
Publisher: |
Elsevier |
Keywords: | Neoclassical growth model Continuously distributed time delay Fixed time delay Complex dynamics Period-doubling bifurcation |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Neoclassical growth model with two fixed delays
Guerrini, Luca, (2019)
-
Cartelizing groups in dynamic linear oligopoly with antitrust threshold
Matsumoto, Akio, (2008)
-
Continuous Hicksian trade cycle model with consumption and investment time delays
Matsumoto, Akio, (2010)
- More ...