On Outward-Looking Comparison Utility, Heterogenous Preferences and the Third Dimension: A Geometric Perspective
29 Pages Posted: 20 Apr 2005
Date Written: December 20, 2004
The difficulties associated with the appraisal of the determinacy properties of a three-dimensional dynamical system are circumvented by the introduction of a new geometrical argument. It first brings about a complete and easy-to-use typology of the eigenvalues moduli in discrete time three-dimensional dynamical systems and then provides a new apparatus for assessing from a geometrical standpoint the emergence of local bifurcations. The argument is first illustrated in an environment where outward-looking comparison utility may question the determinacy of the steady-state and subsequently used within a competitive monetary equilibrium with heterogeneous agents and financial constraints.
Keywords: Local indeterminacy, bifurcation, three-dimensional dynamical systems
JEL Classification: E32, O41
Suggested Citation: Suggested Citation