A generalized diffusive IS-LM business cycle model with delays in gross product and capital stock

Abstract

In this paper, we suggest a diffusive and delayed IS-LM business cycle model with interest rate, general investment and money supply under homogeneous Neumann boundary conditions. The time delays are respectively incorporated into capital stock and gross product. We first demonstrate the model's sound mathematical and economic posing. By examining the corresponding characteristic equation, the local stability of the economic equilibrium and the existence of Hopf bifurcation are proved.