On Dictatorship, Economic Development and Stability

dictator’s power. Second, the dictator’s behavior has a significant impact on the long-term
level of aggregate output.

3.3 Phase diagram: a few graphical examples

To describe the dynamics graphically, we build a phase diagram using the two equations
of the dynamical system (20)-(22). Following the method shown by de la Croix and
Michel (2002), we characterize the set of points (kt, τt) for which there is no change in kt
in equation (20). Solving the equation leads to:

This equation maps the points of the function k_t+1 = k_t . Its derivative with respect to k

is:

Then we characterize the set of points (k_t, τ_t) for which there is no change in τ_t in equation

(22). Solving for this equation leads to:

This equation maps the points of the function τ_t+1 = τ_t . Its derivative with respect to k
is:

<<   22   23   24   25   26   27   28   >>

More intriguing information