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In their semester work, each student solves 2 dynamic economic

December 8, 2021

In their semester work, each student solves 2 dynamic economic models. One of them is continuous (differential equations) and one is discrete (recursive equations). One model is described by one first-order functional equation (differential or recursive) and one model is described by a simultaneous system of two functional equations (differential or recursive) .1. One-equation model Choose the economic model expressed by one functional equation yourself. Information from the Internet, economic and dynamic books and textbooks can be used when choosing models. They must be models that are not addressed in lectures and exercises or the textbook Shone, (2000), they can also be models from unsolved examples of this textbook. Analyze the model: a) express the equation, b) determine the stability conditions, c) decide whether an oscillating course of variables and under what circumstances is possible, d) analyze and interpret the model graphically; display phase, resp. web diagram (depending on whether the model is continuous or discrete), e) display the time course of the examined variable in MS Excel.2. Simultaneous system of two equations The system you can choose yourself available literature or models of examples of simultaneous systems below. Remember that if you have solved a discrete one-equation model, you need a continuous system and vice versa. Analyze the system: a) express the equations b) display the possible isoclines of the trajectory of the system, decide what the trajectory character is (node, saddle point, spiral …), c) display the time course of the investigated variables in Excel, d) display the trajectories of the investigated variables in Excel .

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