A spline collocation approach for a business cycle model with small gestation period in production (Q2289472)

Summary: A B-spline collocation approach is presented for the numerical solution of a business cycle model with a small gestation period in production. The differential equation that models the problem comprises of a nonlinearity that can arise either from the dependence of investment on profits, a Kaldorian-type model, or on capital stocks. The efficiency of the scheme is tested on a number of special cases; it is shown that the nonlinearity leads to a conditionally stable cycle. The rate of convergence is discussed theoretically and verified numerically to be of fourth-order.