What is the time path?
n. a the continuous passage of existence in which events pass from a state of potentiality in the future, through the present, to a state of finality in the past. b (as modifier)
What is explosive oscillation?
Divergent fluctuation (Explosive Oscillations) Here the slope of supply curve is less than the slope of demand curve which means the elasticity of demand is less than the elasticity of supply. This is unstable dynamic equilibrium as the prices and quantities tend to move away from the equilibrium price level.
What is difference equation in economics?
A difference equation is used to solve the values of an unknown function y(x) for different discrete values of x. We obtain a function y(x) such that it satisfies the equation for all values of x.
What is intertemporal equilibrium price?
An intertemporal equilibrium is an economic concept that holds that the equilibrium of the economy cannot be adequately analyzed from a single point in time but instead should be analyzed over the long term.
What is Convergent cobweb?
In words, the convergent case occurs when the demand curve is more elastic than the supply curve, at the equilibrium point. The divergent case occurs when the supply curve is more elastic than the demand curve, at the equilibrium point (see Kaldor, 1934, page 135, propositions (i) and (ii).)
What is differential in economics?
An equation that involves dependent and independent variable and. at least one derivative of the dependent variable with respect to the independent variable is called a differential equation.
What is the first order equation?
A first-order differential equation is defined by an equation: dy/dx =f (x,y) of two variables x and y with its function f(x,y) defined on a region in the xy-plane. It has only the first derivative dy/dx so that the equation is of the first order and no higher-order derivatives exist.
How do you solve market equilibrium?
How to solve for equilibrium price
- Use the supply function for quantity. You use the supply formula, Qs = x + yP, to find the supply line algebraically or on a graph.
- Use the demand function for quantity.
- Set the two quantities equal in terms of price.
- Solve for the equilibrium price.
What is temporal equilibrium?
What Is Intertemporal Equilibrium? An intertemporal equilibrium is an economic concept that holds that the equilibrium of the economy cannot be adequately analyzed from a single point in time but instead should be analyzed over the long term.
Is it arbitrary that the economy must jump at time 0?
5It may appear arbitrary that the economy must jump at time 0 and follow a continuous path in state space afterwards. The reason is that in many continuous-time economic models, jumps in certain variables that arefully expectedare inconsistent with equilibrium because they imply arbitrage opportunities.
What is discrete time in macroeconomics?
1.1 Introduction Most models in macroeconomics are formulated in discrete time. That is, there are time periodst= 0;1;2;:::, where the unit of time is in general arbitrary and can re- fer to a day, a month, or a decade.
What is the unit of time in macroeconomics?
Most models in macroeconomics are formulated in discrete time. That is, there are time periodst= 0;1;2;:::, where the unit of time is in general arbitrary and can re- fer to a day, a month, or a decade. This arbitrariness suggests that it may be helpful, especially when looking at model dynamics, to make the time unit as small as pos- sible.
Where does the economy jump from the steady state?
The economy willjumpfrom (0;0) to a point in the region to the southwest of the steady state. This is the (unique) point that ensures that the economy will go back to point (0;0) atTwhile obeying the liquidity-trap dynamics (1.45)-(1.46) in the mean time.