Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74446
Authors: 
Göcke, Matthias
Year of Publication: 
2012
Series/Report no.: 
Discussion Paper, Zentrum für internationale Entwicklungs- und Umweltforschung 61
Abstract: 
Consequences of path-dependent supply side on the market equilibrium are illustrated. Supply is only a subsystem of the entire market with its forcing variable (price) being endogenous from the perspective of the entire market. This results in feedbacks on the equilibrium of price and quantity if transient exogenous disturbances occur. Aggregate hysteresis is modelled by continuous dynamics showing similarities to 'mechanical play'. This contrast the standard firm level modelling of hysteresis resulting from discontinuous (activity/inactivity) switches. Play dynamics are captured in a simple linearized way, just by adding two parameters to a supply equation.
Subjects: 
path-dependence
play-hysteresis
modelling techniques
JEL: 
C39
C51
C61
Creative Commons License: 
http://creativecommons.org/licenses/by-nc-nd/3.0/de/
Document Type: 
Working Paper

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