Towards Applied Disequilibrium Growth Theory: Ii Intensive Form and Steady State Analysis of the Model

University of Technology Sydney, Finance and Economics Working Paper No. 94

43 Pages Posted: 6 Feb 2006

See all articles by Carl Chiarella

Carl Chiarella

University of Technology, Sydney - UTS Business School, Finance Discipline Group

Peter Flaschel

Bielefeld University - Department of Business Administration and Economics

Date Written: December 1999

Abstract

In this paper we investigate further the 34D applied structural model whose extensive form we introduced in Chiarella and Flaschel (1999c). Here we express the model in terms of intensive form state variables, thereby abstracting from the underlying growth trend. We explain the dynamic (and static) laws of the model directly in terms of the intensive form variables, and then determine the steady state and its characteristics. Finally we show how a small number of simplifying assumptions, concerning in particular consumption of asset holders and some secondary adjustment processes, reduce the 34D model to an 18D core model. It is this latter core model whose detailed structure, steady state characteristics and dynamical behavior will become the object of study in the remaining papers of this sequence.

Suggested Citation

Chiarella, Carl and Flaschel, Peter, Towards Applied Disequilibrium Growth Theory: Ii Intensive Form and Steady State Analysis of the Model (December 1999). University of Technology Sydney, Finance and Economics Working Paper No. 94, Available at SSRN: https://ssrn.com/abstract=880271 or http://dx.doi.org/10.2139/ssrn.880271

Carl Chiarella (Contact Author)

University of Technology, Sydney - UTS Business School, Finance Discipline Group ( email )

PO Box 123
Broadway, NSW 2007
Australia
+61 2 9514 7719 (Phone)
+61 2 9514 7711 (Fax)

HOME PAGE: http://www.business.uts.edu.au/finance/

Peter Flaschel

Bielefeld University - Department of Business Administration and Economics ( email )

P.O. Box 100131
D-33501 Bielefeld, NRW 33501
Germany

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