Chaotic Transients in Nonlinear Economic Cycles

Abstract

In chapter 2, we showed that a nonlinear economic system is intrinsically unstable; as the endogenous or exogenous parameters are varied, the system undergoes a variety of local and global bifurcations such as saddle-node bifurcation and attractor merging crisis, seen in the periodic window in figure 2.5. Chapter 3 showed that saddle-node bifurcation is a route from order to chaos, leading to a chaotic dynamical behavior known as type-I intermittency. Chapter 5 analyzed an attractor merging crisis in chaotic business cycles which leads to a transition from weak chaos to strong chaos; the strong chaos exhibits a dynamical behavior known as crisis-induced intermittency, as seen in chapter 4.