The economies of almost every country in the whole word have been suffered from coronavirus pandemic consequences. The damage was especially hard for labor markets. The large magnitude of demand and production shocks that was caused by COVID-19 significantly disturbed the dynamics of output, wages and prices. The research problem addressed in this paper focuses on dynamic properties of wages and prices behavior influenced by shocks with different magnitudes and types. We apply a system dynamic approach to conduct the simulations of economic variables and investigate the possibility of their convergence to some stable path. We examine the impact of demand and production shocks on the output and prices as well as on wage and inflation behavior. It is proved that values of models parameters are crucial for existing of new steady state and convergence of economic variables. The paper determines the bifurcation points that separate different modes of transition period in moving towards or away from equilibrium. The research includes the investigation of the impact of economy’s original state and emphasizes the importance of initial point of the system for the next its dynamics after shock. The research results derived in the paper serves as a useful learning tool to develop a discussion of the policy design issues related to reduction of negative impact of severe and unanticipated disturbance like COVID-19.

Regardless of the fact, whether governments of particular country implemented the strong lockdown measures to prevent the spread of COVID-19 or not, the economies of each country all over the word have been suffered considerably due to the shocks caused by the pandemic. We observed slowdown of economic activity, macroeconomic instability and shifts in consumption preferences supplemented by rising unemployment as well as significant fluctuation of demand and production capability. The research problem addressed in this paper focuses on dynamic properties of output and inflation fluctuations that occur in response to economic shocks different magnitudes and types. We use a system dynamic approach and constructs two system dynamic models to examine the dynamics of output, prices, wage and inflation. The paper indicates ranges of relevant parameters’ values that correspond with sensitivity of output to demand and production capability changes related to possibility of reaching new equilibrium point. To explore the variety of prices and wage behavior in response to shocks we evaluate distinguish possible phase diagrams associated with stable node, stable focus, circle, unstable focus and unstable node. The results is a contribution to discussion of the policy issues related to mitigation of recession caused by unpredictable and strong shocks.

Козицький В.А. кандидат фізико-математичних наук, доцент, доцент кафедри математичної економіки та економетрії Львівського національного університету імені Івана Франка Берегова Г.І. кандидат фізико-математичних наук, доцент, доцент кафедри обчислювальної математики та програмування Національного університету «Львівська політехніка» Пабирівська Н.В. кандидат фізико-математичних наук, доцент, доцент кафедри вищої математики Національного університету «Львівська політехніка» SYSTEM DYNAMIC NONLINEAR MODELING OF PRICE STABILITY СИСТЕМНЕ ДИНАМІЧНЕ НЕЛІНІЧНЕ МОДЕЛЮВАННЯ ЦІНИ СТАБІЛЬНОСТІThe article investigates the dynamic properties of price indexes based on the system dynamics approach that is a simulation modeling approach to monetary policy analysis and design. It applies to dynamic problems that describe complex economic and social systems including information and material delays as well as feedback and circular causality. The simulation nonlinear model takes into account the nonlinear process of price adjustment. The simulation results showed that the behavior of price indexes could change dramatically that was driving by small change in initial conditions and parameters of system. It has been obtained that the inflation process looked often as unpredictable and chaotic system although it had underlying sources and its driving forces did not demonstrate pure randomness. The price dynamics should be considered in a system and dynamic view and it is important to estimate the direction and magnitudes of unemployment and inflation responses on positive and negative economic shocks.

We study non-regularity of growth of the fractional Cauchy transformin terms of the modulus of continuity of the function ψ. Sharp estimates of the lower logarithmic order of f are found. In the case α ∈ (0, 1) the estimates are of different form than that for the logarithmic order.