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Business Cycles In A General Equilibrium Dynamic Model With Land Value And Rent

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  • Wei-Bin Zhang

Abstract

This study shows economic oscillations due to periodic changes in some parameters in the economic model proposed by Zhang (2014). This paper generalizes Zhang’s model by allowing all the time-independent parameters to be timedependent. The model deals with the relationship between growth and inequality in a two-sector growth modelling framework with different time-dependent exogenous shocks. The model is based on the Walrasian general equilibrium theory and the Solow-Uzawa neoclassical growth theory. The study applies the utility function proposed by Zhang to describe the behaviour of households. We simulate the model to demonstrate the existence of equilibrium points, the motion of the dynamic system, and oscillations due to different exogenous shocks.

Suggested Citation

  • Wei-Bin Zhang, 2018. "Business Cycles In A General Equilibrium Dynamic Model With Land Value And Rent," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 63(216), pages 7-34, January –.
    • Handle: RePEc:beo:journl:v:63:y:2018:i:216:p:7-34
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    More about this item

    Keywords

    Walrasian general equilibrium theory; neoclassical growth theory; inequality in income and wealth; economic fluctuations; oscillatory shocks;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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