Typically, it concentrates on macroeconomic relations, particularly the ratio of savings to total output and the aggregate capital output ratio (that is, the number of units of additional capital required to produce an additional unit of output).
One can argue that business cycle phases can change over time in relation to macroeconomic fundaments.
Finally, instead of linear terms in model (1), our new discrete model involves nonlinear relation of macroeconomic variables, which is more accurate in describing the actual data.
These estimates are based on different assumptions in relation to macroeconomic changes, trade policy changes, and other factors such as agricultural productivity and climate change.
The coupled relation of macroeconomic variables is expressed via a group of difference equations and the power-law property is characterized by the generalized fractal derivative containing two parameters.
Sargent developed a method, based on the analysis of historical data, for describing basic relations between macroeconomic indicators and expectations of economic policy that are not affected when economic policy shifts.
To describe the anomalous inner structure of economic and financial models, many dynamical systems are proposed to model the relations of macroeconomic variables.
Moreover, the method can be also applied to study the relation of other macroeconomic variables from other countries without many major modifications.
In our research, we show that the fractal derivative modeling can be used to investigate the coupled relation of different macroeconomic variables.
