The Problem of Modeling of Economic Dynamics (new version)

TL;DR

This paper critiques Harrods' economic model, proposes an alternative, and introduces a methodology based on integral equations for modeling economic dynamics and forecasting.

Contribution

It presents a corrected approach to macroeconomic modeling using integral equations, expanding on Phillips model and addressing exponential growth limitations.

Findings

Demonstrates inadequacy of exponential economic growth assumptions

Develops a methodology based on balance relations and integral equations

Provides a framework for economic forecasting using Volterra and Fredholm equations

Abstract

The correctness of Harrods model in the differential form is studied. The inadequacy of exponential growth of economy is shown; an alternative result is obtained. By example of Phillips model, an approach to correction of macroeconomic models (in terms of initial prerequisites) is generalized. A methodology based on balance relations for modelling of economic dynamics, including obtaining forecast estimates, is developed. The problems thus considered are reduced to the solution of Volterra and Fredholm integral equations of the second kind.