Title

A simple chaotic model of economic growth and unemployment

Author

Saura, D.

Vázquez, F. J.

Roa García, M. J.

Access level

Open Access

Summary or description

The study of natural fluctuations has been of great interest for

economists for decades. Although the earliest formal models of business

cycles, around the 1950s, were endogenous (Hicks, Kaldor, Goodwin), the

dominant strategy during the most of the last century has been to assume

model specifications for which the equilibrium is determinate and

intrinsically stable, so that in the absence of continuing exogenous shocks

the economy would tend toward a steady state growth path. By the early

1980's, however, there was a revival of interest in the hypothesis that

aggregate fluctuations might represent an endogenous phenomenon that

would persist even in the absence of stochastic shocks to the economy.

Some authors began to elaborate models with the objective of showing how

the nonlinear internal dynamics of the economy generate complex

behaviour that appears to be random, providing excellent fits to the

behaviour of economic series. In these models, fluctuations result mainly

from high level of impatience, imperfect markets or erroneous foresights of

the individuals. The purpose of this paper is to show how complex

behaviour can emerge from quite simple economic structures. In particular,

when sufficient nonlinearities are present, the interaction of some essential

elements of developed economies generates irregular fluctuations

endogenously. The elements we will consider as representative of a

developed economy are economic growth, sustained by knowledge

accumulation, and unemployment.

Desde hace décadas los economistas han mostrado un enorme

interés por el estudio de las fluctuaciones. El objetivo de este trabajo es

mostrar como modelos económicos sencillos pueden generar fluctuaciones

muy complejas. Para ello elaboramos un modelo de crecimiento endógeno

con acumulación de capital humano y desempleo. Este último es introducido

mediante una dinámica de salarios, en particular una curva de Phillips no

lineal. Mostramos cómo la introducción de desequilibrios genera dinámicas

más complejas de la que habitualmente obtienen los modelos neoclásicos

de crecimiento. La tasa de desempleo y la renta per capita fluctúan a lo

largo de ciclos de diferentes periodos, e incluso trayectorias caóticas. En

particular, cuanto mayor es el grado de desarrollo de la economía mayor es

la posibilidad de obtener dinámicas complejas. Además, en la misma línea

que los modelos de negociación de salario, obtenemos que cuanto mayor es

el poder de negociación de los trabajadores, menores son la tasa de

desempleo y la producción per capita.

Publisher

Centro de Investigación y Docencia Económicas, División de Economía

Publish date

2006

Publication type

Working paper

Format

application/pdf

Language

English

Audience

Students

Researchers

Source repository

Repositorio Digital CIDE

Downloads

202

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