Belief and Deterministic Randomness in a One-Sector Discrete Time Optimal Growth Model: The Case of Hong-Kong

• 영문명: Belief and Deterministic Randomness in a One-Sector Discrete Time Optimal Growth Model: The Case of Hong-Kong
• 발행기관: 세종대학교 경제통합연구소
• 저자명: C Rene Dominique
• 간행물 정보: 『Journal of Economic Integration』제5권 제2호, 21~27쪽, 전체 7쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 1990.09.30

영문 초록

It is now well established that fears or arbitrary beliefs may become self-fulfilling economic prophecies. Given the oscillatory behavior displayed by the Hong-Kong economy since 1985, a constraining exogenous belief is modelled into a one-sector discrete time optimal growth model, which purports to mimic capital accumulation there. It shows that revisions of agents` expectations, stemming from that belief, suffice to change the nature of the equilibrium point from fixed points to limit cycles of every integer period. In fact, as the real or imaginary but credible constraint is being approached, the economic system begins to display totally aperiodic trajectories which are indistinguishable from the realization of a stochastic process.