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Convergence, cycles and complex dynamics of financing investment

Datta, Soumya (2013): Convergence, cycles and complex dynamics of financing investment.

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Abstract

This paper demonstrates the diverse dynamical possibilities of a simple macroeconomic model of debt-financed investment-led growth in the presence of interest rate rules. We show possibilities of convergence to steady state, growth cycles around it as well as various complex dynamics from codim 1 and codim 2 bifurcations. The effectiveness of monetary policy in the form of interest rate rules is examined under this context.

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