Intermittent transition between synchronization and desynchronization in multi-regional business cycles

Empirical studies often conclude that multi-regional business cycles exhibit intermittent transition between synchronization and desynchronization of each regional fluctuations. In this study, we robustly observe this behavior (called chaotic itinerancy) in a model of multi-regional business cycles, in which all regions of a national economy are homogeneous and connected through producers' behavior based on the average level announced by the government. Although a producer very slowly adjusts his/her output towards the average level, regional business cycles begin to synchronize because of the entrainment effect. Moreover, when a producer emphasizes the profit maximization more and when puts more weight on the average level in his/her decision-making, the economy is more likely to exhibit such intermittent transition. Further, it is clarified that behind intermittent transition exist cycles among periodic orbits with different number of unstable directions.