Limit cycles in intertemporal adjustment models: Theory and applications

Feichtinger G, Novak A, & Wirl F (1994). Limit cycles in intertemporal adjustment models: Theory and applications. Journal of Economic Dynamics and Control 18 (2): 353-380. DOI:10.1016/0165-1889(94)90013-2.

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Abstract

This paper starts from well-behaved (i.e., concave) one-state-variable optimal control models. The crucial feature is that indigenous growth is present. The replacement of the control by an adjustment process and presumably penalizing these adjustments may convert stable (and only stable) fixed point equilibria into limit cycles. Indeed, given positive growth and proper externalities (such that discounting exceeds growth), one can generate stable limit cycles with ease, e.g., for a separable framework. Examples from such diverse fields as renewable resources, optimal saving and public choice highlight the economic applicability.

Item Type: Article
Uncontrolled Keywords: Stable limit cycles; Hopf bifurcation; Renewable resources; Optimal saving; Subsidies
Research Programs: World Population (POP)
Bibliographic Reference: Journal of Economic Dynamics and Control; 18(2):353-380 (March 1994)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 02:03
Last Modified: 23 Feb 2016 12:59
URI: http://pure.iiasa.ac.at/3860

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