Modeling The Dynamic Macroeconomic Theories Of Gebrehiwot Baykedagn

A mathematical model is specified for the dynamic macroeconomics theories of GebrehiowtrnBaykedagn on conflict, unequal exchange, and public spending on human capital formation.rnBased on the theory, through time total output increases with higher labour force participationrnresulted from public spending on human capital formation, political stability and tradernequivalence and it declines with land degradation resulted from political instability ( conflict)rnand unequal exchange in the international trade through time. Hence, to show how the totalrnoutput reach at the steady state, we have derived the equilibrium path of the model under threerndifferent scenarios both graphicall y and mathematically. Based on the specified model, in thernscenario of which the rate of growth in total output due to labour force participation through timernis equal to the rate of decrease in total output due to land degradation, the economy will be at thernsteady state, otherwise in the downward or upward trend of the equilibrium path. Furthermore, inrnorder to see how the overall economy moves, a counter factual dynamic simulation isrnex perimented and found to be consistent with the model under the scenario of a shock to publicrnspending on human capital formation and a shock to political stability.

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