Endogenous oscillations in a discrete dynamic model with inventory (Q1303504)

Summary: Introducing the producer's intertemporal optimizing behavior, we extend the Eckalbar disequilibrium marcro-model [\textit{J. Eckalbar}, Econ. J. 95, 976-991 (1985)] and reconsider the dynamic features of the modified model. We concern ourselves with the existence of inventory cycles when the expectations are formed adaptively. The endogeneous inventory cycle is detected using the Hopf bifurcation theorem in which a bifurcation parameter is an adaptive coefficient. It is also demonstrated that the generated cycle is subcritical.