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Entrepreneurship and Unemployment Cycles: A Delay Differential Equation Approach |
Jo?o Ricardo Faria() |
MPA Program, University of Texas at El Paso, El Paso, TX 79968-0703, USA |
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Abstract This paper is an application of delay differential equations to entrepreneurship and unemployment. It shows that the results of empirical studies can be replicated through a simple DDE. The paper also carries out a comparative study between a solution of a DDE and the observation of cyclic behaviors. The calculated delay (and growth rate) of the entrepreneurship DDE for the US and Spain is 1.25 years (1.25), for Ireland is 1.75 years (0.89), and for the UK is 2 years (0.78). The delay (and growth rate) of the unemployment DDE for the US and Ireland is 1.5 years (1.04), for Spain is 2 years (0.78), and for the UK is 2.5 years (0.62).
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Keywords
new firms
employment creation
cycles
delay differential equations
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Corresponding Author(s):
Jo?o Ricardo Faria,Email:rfaria2@utep.edu
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Issue Date: 05 June 2013
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