On the significance of borders: the emergence of endogenous dynamics

Ingrid Kubin, Laura Gardini

Publication: Scientific journalJournal articlepeer-review

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Abstract

We propose a prototype model of market dynamics in which all functional relationships are linear. We take into account three borders, defined by linear functions, that are intrinsic to the economic reasoning: non-negativity of prices; downward rigidity of capacity (depreciation); and a capacity constraint for the production decision. Given the linear specification, the borders are the only source for the emerging of cyclical and more complex dynamics. In particular, we discuss centre bifurcations, border collision bifurcations and degenerate flip bifurcations—dynamic phenomena the occurrence of which are intimately related to the existence of borders.
Original languageEnglish
Pages (from-to)41 - 62
JournalJournal of Economic Interaction and Coordination
Volume17
DOIs
Publication statusPublished - 2022

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502001 Labour market policy
  • 502047 Economic theory
  • 502003 Foreign trade

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