The existence, uniqueness and stability of steady state for a class of first-order difference equations with application to the housing market dynamic
Journal Publication ResearchOnline@JCUAbstract
We study the existence, uniqueness and stability of the steady state for the dynamic described by a class of first-order difference equations. We then apply the result to analyse a housing market where the supply is linear and demand is a bounded and monotone decreasing function of price, derived from households’ optimization behaivour. Under two linear price adjustment mechanisms, we prove the existence and uniqueness of an equilibrium, which is independent of the mechanisms. That is, the house price converges to a same steady state where it clears the market under both mechanisms. The result is general in the sense that we do not need to specify a particular form of demand function. Besides, the same approach can be utilized to analyse the dynamics of other markets.
Journal
Results in Applied Mathematics
Publication Name
Results in Applied Mathematics
Volume
21
ISBN/ISSN
2590-0374
Edition
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Issue
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Pages Count
4
Location
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Publisher
Elsevier
Publisher Url
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Publisher Location
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Publish Date
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Date
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EISSN
N/A
DOI
10.1016/j.rinam.2024.100433