Kamill, Anton Abdulbasah and Baharum, Adam (2009) Simple Version of the Linear Business Cycle Model. In: The 5th IMT-GT International Conference On Mathematics,Statistics And Their Applications ICMSA 2009, June 9-11,2009, The Hills Hotel, Bukittinggi,Indonesia.
The paper developed a linear business cycle model. To analyze the impact of small changes in productivity, the model is linearized around the steady state which allows us to find optimal level of consumption and investment under assumption of perfect foresight i.e, knowledge of all future values of the total factor productivity.
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