Entrepreneurship and Unemployment Cycles: A Delay Differential Equation Approach

João Ricardo Faria

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PDF(201 KB)
Front. Econ. China ›› 2013, Vol. 8 ›› Issue (2) : 288-292. DOI: 10.3868/s060-002-013-0015-8
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Entrepreneurship and Unemployment Cycles: A Delay Differential Equation Approach

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Abstract

This paper is an application of delay differential equations to entrepreneurship and unemployment. It shows that the results of empirical studies can be replicated through a simple DDE. The paper also carries out a comparative study between a solution of a DDE and the observation of cyclic behaviors. The calculated delay (and growth rate) of the entrepreneurship DDE for the US and Spain is 1.25 years (1.25), for Ireland is 1.75 years (0.89), and for the UK is 2 years (0.78). The delay (and growth rate) of the unemployment DDE for the US and Ireland is 1.5 years (1.04), for Spain is 2 years (0.78), and for the UK is 2.5 years (0.62).

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new firms / employment creation / cycles / delay differential equations

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João Ricardo Faria. Entrepreneurship and Unemployment Cycles: A Delay Differential Equation Approach. Front Econ Chin, 2013, 8(2): 288‒292 https://doi.org/10.3868/s060-002-013-0015-8

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2014 Higher Education Press and Brill
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