Non-linear model of the macroeconomic system dynamics: multiplier-accelerator

Abstract

The article discusses one of the classic problems of macroeconomic dynamics, on which the neo-Keynesian theory of growth is based, so that the interaction between the multiplier and the accelerator. A new approach was proposed to develop a mathematical model of the dynamics of the mutual multiplier, which indicates the marginal propensity to save as a result of the GDP growth, and the accelerator, which reflects the growth of capital of the national income in the multiplier. The model is based on the hypothesis of non-linear dependence of the consumption on the amount of profit. This assumes that consumption growth is limited, i.e., a saturation effect occurs. In addition, the model took into account the delayed reaction of the accelerator to the influence of the multiplier. Under building the model, the considered processes were considered continuous in time. This made it possible to provide the mathematical model ”accelerator - multiplier” as a system of two differential equations of the first order. The application of the developed model to the analysis of the dynamic properties of the macroeconomic system makes it possible to evaluate the parameters at which the ”multiplier-accelerator” system enters a critical state. It has been proven that the conditions for the occurrence of self-oscillations depend on the critical value of the accelerator power. The presence of a two-fold limit cycle with corresponding ”soft” and ”hard” modes of birth (death) of the limit cycle was also founded. The applied usefulness of the model is that the choice of management decisions taking into account these results allow us preventing the occurrence of bifurcations and disasters in the process of evolution of the macroeconomic systems.