Bifurcation Analysis Applied to Structural Economic Dynamics with a Choice of Technique: A Numerical Example

32 Pages Posted: 21 Nov 2017

Date Written: November 19, 2017

Abstract

This article illustrates the application of bifurcation analysis to structural economic dynamics with a choice of technique. A numerical example of the Samuelson-Garegnani model is presented in which technical progress is introduced. Examples of temporal paths through the parameter space illustrate variations of the wage frontier. A single technique is initially uniquely cost-minimizing for all feasible rates of profits. Eventually, the technique for which coefficients of production decrease at the fastest rate is always cost-minimizing. This example illustrates possible variations in the existence of Sraffa effects, which arise during the transition between these positions.

Keywords: Choice of technique, Structural dynamics, bifurcations, switch points, technological change

JEL Classification: B51, C67, D24

Suggested Citation

Vienneau, Robert L., Bifurcation Analysis Applied to Structural Economic Dynamics with a Choice of Technique: A Numerical Example (November 19, 2017). Available at SSRN: https://ssrn.com/abstract=3073641 or http://dx.doi.org/10.2139/ssrn.3073641

Robert L. Vienneau (Contact Author)

Independent ( email )

209 Maple Street
Rome, NY 13440
315-336-5417 (Phone)
315-334-4964 (Fax)

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