Acta mathematica scientia,Series B ›› 2000, Vol. 20 ›› Issue (4): 442-450.

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APPLICATIONS OF HAMILTONIAN AND LAPLACE TRANSFORM IN AN ECONOMIC MODEL

 GONG Liu-Tang   

  1. Guanghua School of Management, Peking University, Beijing 100871, China
    Institute of Advanced Economic Studies, Wuhan University, Wuhan 430072, China
  • Received:1999-05-04 Online:2000-06-15 Published:2000-06-15

Abstract:

This paper analyzes the long-run effects and short-run effects of foreign aid
on the domestic economy by using the Hamilton system and Laplace transform. It is
found that an increase in the foreign aid has no long-run effect on the foreign borrowing,
domestic capital accumulation and the foreign direct investment in the home country, but
increases the steady-state consumption level the same amount. However, the short-run
analysis presents that increasing foreign aid does not affect the initial consumption level
and the initial consumption increase rate; but it affects the initial savings positively.

Key words: Hamilton system, Laplace transform, foreign aid, capital accumulation

CLC Number: 

  • 90A16
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