Institute of Information Theory and Automation

Publication details

Complex Price Dynamics in the Modified Kaldorian Model

Journal Article

Kodera Jan, Van Tran Q., Vošvrda Miloslav

serial: Prague Economic Papers vol.22, 3 (2013), p. 358-384

project(s): GBP402/12/G097, GA ČR

keywords: Priice dynamics,, numerical examples, two-equation model, four-equation model, nonlinear time series analysis

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abstract (eng):

To reconstruct the neoclassical theory of inflation to obtain a model which generates non-periodical oscillations of price level which is considered to be a realistic approximation of actual price level evolution. Analysis with the Fisherian equation of exchange. The assumption on non-variability of the velocity of money circulation parameter is relaxed in favour of dependence on expected inflation. Model of inflation is a two-equation model where price evolution depends on production dynamics which is assumed to be an exogeneous variable. By adding Kaldor's model to the two equation systm a four equation model is formed.Constructed model is able to generate more complex dynamics i.e. non-linear cycles and chaos.


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Last modification: 21.12.2012
Institute of Information Theory and Automation