Synergetic Economics pp 132-160 | Cite as

# Stochastic Processes and Economic Evolution

Chapter

## Abstract

We have shown that random economic behavior may occur in relatively very simple differential equations. Regular and irregular oscillations may be created endogenously by relatively simple interactions among economic variables. There is order in chaos. However, as we have explained before, there is another way to explain economic fluctuations. Dynamic systems which are subjected to external noise can exhibit irregular behavior. For instance, consider a simple example of a periodically driven (pendulum) equation (see Schuster 1988) , where

$$\frac{{{d^{2}}x}}{{{d^{2}}t}} + \frac{{rdx}}{{dt}} + \sin x = A\cos \left( {\omega t} \right),$$

*r*is the damping constant,*A*represents the amplitude and*ω*the frequency of a driving torque.## Keywords

Lyapunov Exponent Hopf Bifurcation Master Equation Small Fluctuation External Noise
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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## Copyright information

© Springer-Verlag Berlin Heidelberg 1991