Equilibrium risk level for investment cycle

Abstract

 One considers a model with higher investment at higher IRR levels and vice versa. One assumes IRR increase monotonously with increase of price of the let-out product. The prices submit to the equation of Evans, in which a nonconventional term appears, that represents the increasing with price demand for long-term production factors. If the ratio of the revenue minus current expenses one re-invests grows enough rapidly with growth of IRR then there appear 2 stable short-term equilibriums (divided with 1 instable), understood as growth and crisis. In long-term the dynamics of the system passes through jump transitions from one phase to another. We derive amplitude of the oscillations and equilibrium risk.