The non-robustness of saddle-point dynamics: A methodological perspective

Donald George

Research output: Chapter in Book/Report/Conference proceedingChapter (peer-reviewed)peer-review

Abstract

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.
Original languageEnglish
Title of host publicationKeynesian, Sraffian, Computable and Dynamic Economics
Subtitle of host publicationTheoretical and Simulational (Numerical) Approaches
EditorsKumaraswamy Velupillai
PublisherPalgrave Macmillan
Chapter9
Pages231-252
Number of pages22
ISBN (Electronic)9783030581312
ISBN (Print)9783030581305
DOIs
Publication statusE-pub ahead of print - 9 Mar 2021

Keywords

  • saddle-point
  • robustness
  • growth
  • inflation
  • rational expectations

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