Munich Personal RePEc Archive

Stability analysis in economic dynamics: A computational approach

Halkos, George and Tsilika, Kyriaki (2012): Stability analysis in economic dynamics: A computational approach.

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Abstract

Modern microeconomics and macroeconomics study dynamic phenomena. Dynamics could predict future states of an economy based on its structural characteristics. Economic dynamics are modeled in discrete and continuous time context, mainly via autonomous difference and differential equations. In this study, we use Xcas and Mathematica as software tools, in order to generate results concerning the dynamic properties of the solutions of the difference and differential equation(s) models and determine whether an economic equilibrium exists. Our computational approach does not require solving the difference or differential equation(s) and makes no assumptions for initial conditions. The results provide quantitative information based on the qualitative properties of the mathematical solutions. The computer codes are fully presented and can be reproduced as they are in computational-based research practice and education. The relevant output of CAS software is created in a way as to be interpreted without the knowledge of advanced mathematics.

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