Abstract
Complex dynamics of economic systems can be studied by applying the concepts and techniques of nonlinear dynamics and chaos. Some models of business cycles, such as Kaldor’s nonlinear investment-savings functions and Goodwin’s nonlinear accelerator-multiplier, can be reduced to the van der Pol equation which describes relaxation oscillations. By introducing an exogenous driver, the forced van der Pol equation can be adopted as a prototype model for complex economic dynamics. Numerical solutions of this model can elucidate the fundamental properties of complex economic systems which exhibit a wealth of nonlinear behaviors such as multistability as well as coexistence of order and chaos. Unstable periodic orbits are the skeleton of chaotic attractors in complex economic systems.
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© 2007 Springer-Verlag Berlin Heidelberg
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(2007). Nonlinear Dynamics of Economic Cycles. In: Complex Systems Approach to Economic Dynamics. Lecture Notes in Economics and Mathematical Systems, vol 592. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-39753-3_2
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DOI: https://doi.org/10.1007/978-3-540-39753-3_2
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-39752-6
Online ISBN: 978-3-540-39753-3
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