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2018 Bridging the Gap between Economic Modelling and Simulation: A Simple Dynamic Aggregate Demand-Aggregate Supply Model with Matlab
José M. Gaspar
J. Appl. Math. 2018: 1-13 (2018). DOI: 10.1155/2018/3193068

Abstract

This paper aims to connect the bridge between analytical results and the use of the computer for numerical simulations in economics. We address the analytical properties of a simple dynamic aggregate demand and aggregate supply (AD-AS) model and solve it numerically. The model undergoes a bifurcation as its steady state smoothly interchanges stability depending on the relationship between the impact of real interest rate on demand for liquidity and how fast agents revise their expectations on inflation. Using code embedded into a unique function in Matlab, we plot the numerical solutions of the model and simulate different dynamic adjustments using different parameter values. The same function also accommodates the analysis of the impacts of fiscal and monetary policy and supply side shocks on the steady state and the transition dynamics of the model.

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José M. Gaspar. "Bridging the Gap between Economic Modelling and Simulation: A Simple Dynamic Aggregate Demand-Aggregate Supply Model with Matlab." J. Appl. Math. 2018 1 - 13, 2018. https://doi.org/10.1155/2018/3193068

Information

Received: 13 July 2017; Accepted: 28 November 2017; Published: 2018
First available in Project Euclid: 14 February 2018

MathSciNet: MR3754654
Digital Object Identifier: 10.1155/2018/3193068

Rights: Copyright © 2018 Hindawi

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