Bifurcations and Switch Points
25 Pages Posted: 29 Jun 2017
Date Written: June 28, 2017
This article analyzes structural instabilities, in a model of prices of production, associated with variations in coefficients of production, in industrial organization, and in the steady-state rate of growth. Numerical examples are provided, with illustrations, demonstrating that technological improvements or the creation of differential rates of profits can create a reswitching example. Variations in the rate of growth can change a "perverse" switch point into a normal one or vice versa. These results seem to have implications for the stability of short-period dynamics and suggest an approach to sensitivity analysis for certain empirical results regarding the presence of Sraffa effects.
Keywords: bifurcation analysis, choice of technique, reswitching, capital reversing
JEL Classification: B24, D24, D43
Suggested Citation: Suggested Citation