Hillinger, C., Reiter, M. and Weser, T. (1992) Micro Foundations of the Second-Order Accelerator and of Cyclical Behavior. In: Hillinger, C., Ed., Cyclical Growth in Market and Planned Economies, Clarendon Press, Oxford, 167-180.

has been cited by the following article:

• TITLE: Modeling Investment Cycles: A Theoretical Analysis

  AUTHORS: Eleni Dalla, Christos Karpetis, Erotokritos Varelas

  KEYWORDS: Investment Cycles, Second Order Accelerator, Capital, Exogenous Credit Term

  JOURNAL NAME: Modern Economy, Vol.7 No.3, March 25, 2016

  ABSTRACT: This paper establishes a second order accelerator model (Hillinger [1] [2]) in discrete time. More specifically, we present a three-equation structural model in order to examine the behavior over time of capital. Our purpose is the analysis of investment cycles, defined as the quasi-periodic cyclical motion of capital. It is demonstrated that when the trigonometric oscillation is the case, the system is dynamically stable. In addition, we extend the analysis, introducing an exogenous credit term, the interest rate on loans, as an unknown function of time in the behavioral equation of investors. We infer that the introduction of this credit term results in an alternative equilibrium level of capital.