Bessenyei István and Horváth Márton: Economic growth with incomplete financial discipline.
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Abstract
We introduce soft budget constraint and stop-go policy into a stable two-sector AK macromodel. As the extended model does not have any fixed point, we use computer-simulation to examine the dynamic behaviour of the model. We show that depending on the starting position and the parameter values, the economy can follow a path leading to the collapse or moves oscillatory avoiding the downfall. Further on, we demonstrate that the partial shortage of financial discipline leads to wrong investment decisions which slow the process of capital accumulation. The macroeconomic path directed to the collapse can be reversed by strengthening the financial discipline, keeping down corruption, modification of preferences in investment policy or exogenous technological change.
| Item Type: | Conference or Workshop Item |
|---|---|
| Journal or Publication Title: | Crisis Aftermath: economic policy changes in the EU and its Member States : International Conference University of Szeged 8-9 March 2012 : conference Proceedings |
| Date: | 2012 |
| ISBN: | 978-963-306-159-6 |
| Page Range: | pp. 307-314 |
| Language: | English |
| Related URLs: | http://acta.bibl.u-szeged.hu/57377/ |
| Uncontrolled Keywords: | Gazdaságpolitika |
| Additional Information: | Bibliogr.: 314. p. ; összefoglalás angol nyelven |
| Date Deposited: | 2019. May. 20. 10:44 |
| Last Modified: | 2026. Feb. 24. 08:10 |
| URI: | http://acta.bibl.u-szeged.hu/id/eprint/57500 |
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