Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7243456 | Journal of Economic Behavior & Organization | 2014 | 30 Pages |
Abstract
We investigate the generation of chaos in economic models through exogenous shocks. The perturbation is formulated as a pulse function where either values or instants of discontinuity are chaotically behaved. We provide a rigorous proof of the existence of chaos in the perturbed model. The analytical results are applied to Kaldor-Kalecki-type models of the aggregate economy subject to export and rainfall shocks, respectively. Simulations are used to demonstrate the emergence and the control of chaos. Our results shed light on a novel source of chaos in economic models and have important implications for policy-making.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Marat Akhmet, Zhanar Akhmetova, Mehmet Onur Fen,