Nonlinear Economic Time Series as a Testbed for Dynamic Macro Models Including Finance

Abstract

This is consequent upon an earlier paper of mine (Non linear economic time series as a test bed for dynamic macro models) which was an exercise in using nonlinear time series analysis (NLTS) to assess the fit of a dynamic nonlinear macro economic process, the Goodwin model, against “realworld” nonlinear time series.

This paper extends that approach to address models which include Finance and Debt as variables. Notably the work of Professor S Keen, This, Finance and Debt, is something notably missing from Goodwin’s models.