Dynamics of the Solow and Mankiw-Romer-Weil model with endogenous savings rates
DOI:
https://doi.org/10.29015/cerem.197Keywords:
economic growth, Solow model, Mankiw-Romer-Weil model, bifurcation, deterministic chaos, variable savings rates, Lyapunov exponent, equilibrium conditionsAbstract
The purpose of the study is to analyze the properties and dynamics of economic growth model with endogenous savings rates. Considerations are based on discrete versions of the neoclassical Solow growth model and on the extended Solow model. Variable savings rates that depend on behavioral parameters are introduced. It turns out that this modification significantly diversifies the dynamics of the system. There are periodical and quasi-periodical solutions as well as deterministic chaos. Therefore, long run forecasting is limited.References
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