How do Macroeconomic Aggregates behave during the Evolution of an Economy: A Nonlinear Dynamics Approach

Description :

We prove that long-run behavior of GDP, along with its core monetary counterparts and related macroeconomic aggregates, is governed by nonlinear dynamics bounded by structural ceilings, rather than by an unbounded linear trend. These nonlinear forces persist even under sustained monetary expansion and exogenous shocks, revealing a self-constraining architecture that challenges conventional difference-stationary assumptions. We demonstrate, both econometrically and mathematically, that GDP converges toward a definable limit inherent to the economic environment. Our breakthrough starts with a novel nonlinear stationarization method and a new velocity-of-money function. We reconstruct the classical equation of exchange (MV = PY) under nonlinear interdependence. The theory is applied to nominal and real time series of countries of the EU as well as for the US.

Titulaire :
VERNE Jean-François

Contact USJ :
jean-francois.verne@usj.edu.lb

Chercheur(s) :


Projet présenté au CR, le : 01/09/2023

Projet achevé auprès du CR : 01/06/2026