Acta Universitatis Danubius. Œconomica, Vol 9, No 5 (2013)

A Mathematical Model of an Open Economy with Applications in Romania

Catalin Angelo Ioan, Gina Ioan

Abstract


In this paper, we first study thestatic equilibrium of a a closed economy model in terms of dependence onnational income and interest rate from the main factors namely the marginalpropensity to consume, tax rate, investment rate and the rate of currencydemand. In the second part, we study the dynamic equilibrium solutions in termsof stability. We thus obtain the variation functions of national income andinterest rate variation and their limit values. Finally, we propose twoscenarios of economic development of Romania.

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