The elements of a nonlinear theory of economic dynamics (Q1188683)

This book is of interest from the conceptual as well as the technical point of view, a combination of viewpoints not shared by too many publications in this area. On the conceptual level it attempts to put current achievements into an historical perspective, in particular with respect to the real theories of the business cycle of the fifties and sixties. Its major contribution, however, is given by its longest and final chapter 7, where the perfect-foresight myopia of saddle-point approaches towards economic dynamics is investigated with respect to its weak points. The author there presents a detailed alternative to the somewhat strange standard assumption that is only the (generally one- dimensional) stable manifold that is important for the behavior of economic agents. On the technical level, this book gives a brief introduction into the theory of dynamical systems. The concepts derived in this chapter are then applied to nonlinear multiplier-accelerator models, to the dynamics of the government budget constraint, to the investigation of the effect of time lags in Goodwin's growth cycle model and the recent discussion of the complex behavior of cobweb models. This list shows that the book is mainly of interest for readers with a background in the traditional kind of (macro)dynamics, since no optimizing procedures are used to derive the various types of dynamics that are considered.