Credit expansion and contraction: a simplified model

Krouglov, Alexei (2015): Credit expansion and contraction: a simplified model.

Abstract

Presented is a mathematical model of single-product economy where credit expansion is used to increase the demand for product. Explored is the dynamics of affected product’s price, supply and demand. Shown is that expansion of the demand carries a temporal character.

• Item Type: MPRA Paper
• Language: English
• Keywords: credit expansion; economic fluctuations; modeling
• Subjects: C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C62 - Existence and Stability Conditions of Equilibrium; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers

References

Krouglov, Alexei, 2006, Mathematical Dynamics of Economic Markets (New York: Nova Science Publishers).

Krouglov, Alexei, 2009, “Mathematical Dynamics of Economic Growth as Effect of Internal Savings,” Finance India, Vol. 23, No. 1, pp. 99-136.

Krouglov, Alexei, “Secular Stagnation and Decline: A Simplified Model” (December 18, 2014). Available at SSRN: http://ssrn.com/abstract=2540408 or http://dx.doi.org/10.2139/ssrn.2540408.

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