The property of robustness is defined in connection with macroeconomic models. Models involving saddle-point dynamics are shown not to have this property, raising serious methodological difficulties. Examples from economic growth theory and the theory of inflation are discussed. The proposed solution to these problems is to embrace non-linear dynamic models in macroeconomics and to analyse them without recourse to local linearization.
|Title of host publication||Keynesian, Sraffian, Computable and Dynamic Economics|
|Subtitle of host publication||Theoretical and Simulational (Numerical) Approaches|
|Number of pages||22|
|Publication status||E-pub ahead of print - 9 Mar 2021|
- rational expectations