Finance Discipline Group
UTS Business School
University of Technology, Sydney

Working Paper Series

Title:
Towards Applied Disequilibrium Growth Theory: II Intensive Form and Steady State Analysis of the Model
Author(s): Carl Chiarella & Peter Flaschel
Date of publication: December 1999
Working paper number: 94
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.
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Known citations:

Chen, P., Chiarella, C., Flaschel, P. and Semmler, W., 2006, "The Feedback Channels in Macroeconomics: Analytical Foundations for Structural Econometric Model Building", Central European Journal of Operations Research, 14(3), 261-288.

Chiarella, C. and Flaschel, P., 1999a, "Towards Applied Disequilibrium Growth Theory: I The Starting Model", Working Paper: 93, Finance Discipline Group, University of Technology, Sydney.

Chiarella, C. and Flaschel, P., 2003, "Towards Applied Disequilibrium Growth Theory: V Housing Investment Cycles, Private Debt Accumulation and Deflation", Working Paper: 97, Finance Discipline Group, University of Technology, Sydney.

Chiarella, C., Flaschel, P., Groh, G., Koper, C. and Semmler, W., 1999a, "Towards Applied Disequilibrium Growth Theory: VI Substitution, Money-Holdings, Wealth-Effects and Further Extensions", Working Paper: 98, Finance Discipline Group, University of Technology, Sydney.

Chiarella, C., Flaschel, P., Groh, G., Koper, C. and Semmler, W., 1999b, "Towards Applied Disequilibrium Growth Theory: VII Intensive Form and Steady State Calculation in the Case of Substitution", Working Paper: 99, Finance Discipline Group, University of Technology, Sydney.

Chiarella, C., Flaschel, P. and Semmler, W., 1999, "The Macrodynamics of Debt Deflation", Working Paper: 7, Center for Economic Policy Analysis, New School for Social Research.

Chiarella, C., Flaschel, P. and Zhu, P., 2003, "Towards Applied Disequilibrium Growth Theory: IV Numerical Investigations of the Core 18D Model", Working Paper: 96, Finance Discipline Group, University of Technology, Sydney.

Flaschel, P., 20, "Disequilibrium Growth in Monetary Economies: Basic Components and the KMG Working Model", In Lionello F. Punzo (ed) Cycles, Growth and Structural Change, 128-168.