The topics of this thesis are cycles and chaos in economic dynamics. Endogenous economic fluctuations are discussed in chapter 2 and 3. It is shown that persistent deterministic business cycles, and even chaos, appear in a purely endogenous fashion in an overlapping generations economy with decreasing returns production and profit distribution. To generate such cycles or chaos, the individuals' offer curve need not be backward bending. The origin of the cycles or chaos is sufficient inelasticity of labour demand at high employment levels. Chapter 4 deals with efficiency of competitive equilibrium allocations and monetary policy in overlapping generations models with decreasing return production. All competitive equilibrium allocations are Pareto Optimal. It is argued that monetary policy can not change the set of competitive equilibrium paths, but it is sufficient to "guide" the economy to converge to any competitive equilibrium path in the set. In particular, the government will prefer to lead the economy to converge to the stationary state in order to maximize social welfare. Chapter 5 concerns an allocation problem of renewable resources. The model discussed in this chapter is a non standard dynamic programming model. The existence of cycles and chaos is studied. The focus of this chapter is the relationship between the optimal policy function and the environmental function. Two questions are addressed; whether the optimal control can create chaos when the environment is non chaotic in the absence of control, and conversely, whether the optimal control can bring about a stationary state when the environment is chaotic in the absence of control. The anwser to both is "Yes".
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:594757 |
| Date | January 1993 |
| Creators | Huang, Dazhan |
| Publisher | University of Manchester |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
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