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Business–Cycle Models and the Dangers of Linearizing

Author

Listed:
  • O. Kozlovski

    (Warwick University)

  • P. Pintus

    (Université de la Mediterranée Aix-Marseille II)

  • S. van Strien

    (Warwick University)

  • R. de Vilder

    (DELTA-CNRS-EHESS-ENS
    University of Amsterdam)

Abstract

This paper studies the consequences of linearizing nonlinear business–cycle models near their interior steady state. It is shown that dynamic objects, created for example in a Bogdanov-Takens bifurcation, may be lost in the linearization procedure. Sufficient conditions are provided ensuring the absence of various dynamic features in the nonlinear version of the model.

Suggested Citation

  • O. Kozlovski & P. Pintus & S. van Strien & R. de Vilder, 2006. "Business–Cycle Models and the Dangers of Linearizing," Journal of Optimization Theory and Applications, Springer, vol. 128(2), pages 333-353, February.
    • Handle: RePEc:spr:joptap:v:128:y:2006:i:2:d:10.1007_s10957-006-9019-6
    DOI: 10.1007/s10957-006-9019-6
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    References listed on IDEAS

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