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On the Application of the Laplace Transform in the Study of Phillips-Type Stabilization Policy

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DOI: 10.4236/tel.2015.56080    2,808 Downloads   3,338 Views   Citations
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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.

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The authors declare no conflicts of interest.

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Kageyama, S. (2015) On the Application of the Laplace Transform in the Study of Phillips-Type Stabilization Policy. Theoretical Economics Letters, 5, 691-696. doi: 10.4236/tel.2015.56080.


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