Abstract:
Evidence suggests that macroeconomic variables do not behave in the same manner
during different phases of a country business cycle. The aim of the present work is to find
potential mathematical explanation for asymmetric behavior of the business cycle by
making use of nonlinear dynamic economics. Nonlinear models, even if they are difficult
to conceive, help better explaining asymmetries. I examine autoregressive models,
Markov Switching autoregressive models, asymmetric time series, models with learning
asymmetries, and endogenous business cycle models. Focusing on the mathematical
structure of business cycles, I endogenously incorporate asymmetries in a mathematical
model using difference and differential equations.
