Our purpose in this paper is to expand Goodwin's (1967) distributive cycle model to an open economy framework in a way that incorporates the balance-of-payments constraint on growth. We do so by allowing technical change to be endogenous to the cyclical dynamics of the system and by adopting an independent investment function. We show that a Hopf-Bifurcation analysis establishes the possibility of persistent and bounded cyclical paths both for a 3D and a 4D extension of the model. Some numerical simulations are performed based on the analytical models developed. Motivational empirical evidence is also provided for Thirlwall's law using a sample of 16 OECD countries.

Davila-Fernandez, M.J., Sordi, S. (2019). Distributive cycles and endogenous technical change in a BoPC growth model. ECONOMIC MODELLING, 77, 216-233 [10.1016/j.econmod.2018.09.002].

Distributive cycles and endogenous technical change in a BoPC growth model

Marwil J. Davila-Fernandez
;
Serena Sordi
2019-01-01

Abstract

Our purpose in this paper is to expand Goodwin's (1967) distributive cycle model to an open economy framework in a way that incorporates the balance-of-payments constraint on growth. We do so by allowing technical change to be endogenous to the cyclical dynamics of the system and by adopting an independent investment function. We show that a Hopf-Bifurcation analysis establishes the possibility of persistent and bounded cyclical paths both for a 3D and a 4D extension of the model. Some numerical simulations are performed based on the analytical models developed. Motivational empirical evidence is also provided for Thirlwall's law using a sample of 16 OECD countries.
2019
Davila-Fernandez, M.J., Sordi, S. (2019). Distributive cycles and endogenous technical change in a BoPC growth model. ECONOMIC MODELLING, 77, 216-233 [10.1016/j.econmod.2018.09.002].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11365/1064522