Estimating a modified nonlinear Hicks model: evidence from the Chinese economy (1970‐2007)
| DOI | https://doi.org/10.1108/17544401111143454 |
| Published date | 21 June 2011 |
| Pages | 117-124 |
| Date | 21 June 2011 |
| Author | Panayotis G. Michaelides,Athena Belegri‐Roboli,Gerasimos Arapis |
| Subject Matter | Economics |
Estimating a modified nonlinear
Hicks model: evidence from the
Chinese economy (1970-2007)
Panayotis G. Michaelides, Athena Belegri-Roboli and
Gerasimos Arapis
Laboratory of Theoretical and Applied Mathematics,
Department of Humanities, Social Sciences and Law,
School of Applied Mathematics and Physics,
National Technical University of Athens, Athens, Greece
Abstract
Purpose – The purpose of this paper is to present a non-linear Hicks model of the cycle, based on
Keynesian theory and economic dynamics.
Design/methodology/approach – Using the proposed approach, the paper puts forward a
simple method for its empirical estimation based on nonlinear least squares and other relevant
techniques.
Findings – An example is given to prove the feasibility and the increased validity of the non-linear
dynamic Hicks model. Analytically, an empirical application for the Chinese economy (1970-2007)
demonstrates the almost ideal performance of the modified model and of the proposed method.
Research limitations/implications – If research is reported on in the paper, this section must be
completed and should include suggestions for future research and any identified limitations in the
research process.
Practical implications – What outcomes and implications for practice, applications and
consequences are identified? Not all papers will have practical implications but most will. What
changes to practice should be made as a result of this research/paper?
Social implications – What will be the impact on society of this research? How will it influence
public attitudes? How will it influence (corporate) social responsibility or environmental issues?
How could it inform public or industry policy? How might it affect quality of life? Not all papers will
have social implications.
Originality/value – To the best of the authors’ knowledge, there has not been any attempt in the
literature to formally estimate the famous nonlinear Hicks model of the cycle because of a lack of the
appropriate methodology.
Keywords Nonlinear, Hicksmodel, Dynamics, Chinese economy,National economy, China
Paper type Research paper
1. Introduction
Hicks (1950) was one of the most important economists of the twentieth century.
The most familiar of his contributions are:
.his IS/LM model which is, nowadays, a standard chapter in every economics
textbook; and
The current issue and full text archive of this journal is available at
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JEL classification – C1, C6, C15, O1
Nonlinear Hicks
model
117
Journal of Chinese Economic and
Foreign Trade Studies
Vol. 4 No. 2, 2011
pp. 117-124
qEmerald Group Publishing Limited
1754-4408
DOI 10.1108/17544401111143454
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