Seminario IECON "A dynamic extension of the classical model of production prices determination"

Presenta Martín Puchet (Universidad Autónoma de México)

Abstract  

This paper generalizes the classical model of determination of production prices for two good by introducing a dynamics generated by the possibility that the profit rate is computing using prices of different periods. In this theoretical framework, the prices show a codependency between the two sectors, given by the rate of profit, and inter-industry transactions. In this setup and using discrete time, the model can be represented by a nonlinear two dimensional dynamical system of difference equations of second order. The study shows that the dynamical system admits a unique solution for any initial condition and that there is a unique nontrivial equilibrium. In addition, it can be shown that locally the dynamical system can be represented in the canonical form xt+1 = f(xt) and that the stability of the equilibrium depends on the technological parameters of the production process. Future research includes the extension of the model to the case of several commodities and the simulation of the two goods version of the model.

JUEVES 25/07/2019 (DÍA EXTRAORDINARIO)

12 hs, Salón Multifuncional

Facultad de Ciencias Económicas y de Administración