Marwil J. Dávila-Fernández
DEPS, USiena
Serena Sordi
DEPS, USiena
Abstract
Our purpose in this paper is to expand Goodwin's (1967) distributive cycle model to an open economy framework in a way that incorporates the balance-of-payments constraint on growth. We do so by allowing technical change to be endogenous to the cyclical dynamics of the system and by adopting an independent investment function. We show that a Hopf-Bifurcation analysis establishes the possibility of persistent and boundedcyclical paths both for a 3D and a 4D extension of the model. Some numerical simulations are performed based on the analytical models developed. Motivational empirical evidence is also provided for Thirlwall's law and the respective adjustment mechanism using a sample of 17 OECD countries.
Keywords
Growth cycle; Goodwin; Thirlwalls law; Kaldor-Verdoorn; Distributive cycles; Hopf bifurcation.
Jel Codes
E12; E32; O40
