IDEAS home Printed from https://ideas.repec.org/a/bla/econom/v56y1989i221p97-108.html
   My bibliography  Save this article

Stochastic Stability in Macro Models

Author

Listed:
  • Kiernan, E
  • Madan, Dilip B

Abstract

Stability in macro models may be attained by the addition of heteroskedastic shocks. This is illustrated by stabilizing the Harrod-Domar model in one dimension. In two dimensions, a saddle point is required and the method is applied to the Buiter-Miller model. Choosing broadly Keynesian and monetarist parameterizations, cyclical behavior is investigated on simulated data. The results indicate that Keynesian models are harder to stabilize. When stabilized, they possess cycles of four to five years and monetarist models with large shocks are comparable to the Keynesian model. Copyright 1989 by The London School of Economics and Political Science.

Suggested Citation

  • Kiernan, E & Madan, Dilip B, 1989. "Stochastic Stability in Macro Models," Economica, London School of Economics and Political Science, vol. 56(221), pages 97-108, February.
    • Handle: RePEc:bla:econom:v:56:y:1989:i:221:p:97-108
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0013-0427%28198902%292%3A56%3A221%3C97%3ASSIMM%3E2.0.CO%3B2-J&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Takashi Kamihigashi, 2011. "Recurrent Bubbles," The Japanese Economic Review, Japanese Economic Association, vol. 62(1), pages 27-62, March.
    2. Richard Grabowski & Michael P. Shields, 2000. "A Dynamic, Keynesian Model of Development," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 25(1), pages 1-15, June.
    3. Chiarella, Carl, 1991. "The bifurcation of probability distributions in a non-linear rational expectations model of monetary economy," European Journal of Political Economy, Elsevier, vol. 7(1), pages 65-78, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:econom:v:56:y:1989:i:221:p:97-108. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.