Abstract

We develop a theoretical model involving temporary equilibria with quantity rationing in each period and price adjustment between periods. The resulting dynamic system may present a variety of dynamic behaviors, ranging from the convergence to stationary or quasi-stationary states, to complex or even chaotic dynamics. In particular, our framework has the property of being able to endogenously allow for the characterization of persistent disequilibrium phenomena -- such us unemployment or deflation. It provides therefore for an ideal setup to investigate the effects and persistency of recessionary phases, and to study the effectiveness of different economic policies aimed at resolving them.
Lingua originaleEnglish
Titolo della pubblicazione ospiteNonlinear Dynamics in Economics, Finance and the Social Sciences
EditorC. CHIARELLA AND L. GARDINI G.I. BISCHI
Pagine229-249
Numero di pagine21
Stato di pubblicazionePubblicato - 2010

Keywords

  • deflationary resecessions
  • disequilibrium dynamics
  • economic policy

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