TITLE:
On the Application of the Laplace Transform in the Study of Phillips-Type Stabilization Policy
AUTHORS:
Satoru Kageyama
KEYWORDS:
Stabilization Policy, Multiplier-Accelerator Policy, Transfer Function, Laplace Transform
JOURNAL NAME:
Theoretical Economics Letters,
Vol.5 No.6,
December
4,
2015
ABSTRACT: This paper provides a
reformulation of Phillips’s multiplier-accelerator model with stabilization
policy in terms of the Laplace transform. Applying the Laplace transform, the
differential equations of the economy are transformed into the algebraic ones
on a complex variable. The transfer functions of economic variables are defined
by these algebraic equations. With this representation, we show the effects of
Phillips-type policy on equilibrium level and derive the necessary and sufficient
condition for asymptotic stability.