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Estimating a modified nonlinear Hicks model: evidence from the Chinese economy (1970‐2007)

Panayotis G. Michaelides (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)
Athena Belegri‐Roboli (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)
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)

Journal of Chinese Economic and Foreign Trade Studies

ISSN: 1754-4408

Article publication date: 21 June 2011

228

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

Citation

Michaelides, P.G., Belegri‐Roboli, A. and Arapis, G. (2011), "Estimating a modified nonlinear Hicks model: evidence from the Chinese economy (1970‐2007)", Journal of Chinese Economic and Foreign Trade Studies, Vol. 4 No. 2, pp. 117-124. https://doi.org/10.1108/17544401111143454

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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