Discrete & Continuous Dynamical Systems - B
November 2021 , Volume 26 , Issue 11
Preface: Special issue on nonlinear dynamical systems in economic modeling
Select all articles
In this paper we propose and analyze a game theoretical model regarding the dynamical interaction between government fiscal policy choices toward innovation and training (I&T), firm's innovation, and worker's levels of training and education. We discuss four economic scenarios corresponding to strict pure Nash equilibria: the government and I&T poverty trap, the I&T poverty trap, the I&T high premium niche, and the I&T ideal growth. The main novelty of this model is to consider the government as one of the three interacting players in the game that also allow us to analyse the I&T mixed economic scenarios with a unique strictly mixed Nash equilibrium and with I&T evolutionary dynamical cycles.
This paper analyzes an intertemporal optimization problem in which agents derive utility from three goods: leisure, a public environmental good and the consumption of a produced good. The global analysis of the dynamic system generated by the optimization problem shows that global indeterminacy may arise: given the initial values of the state variables, the economy may converge to different steady states, by choosing different initial values of the control variable.
This paper analyses an optimal monetary policy under a non-linear Phillips curve and linear GDP dynamics. A central bank controls the inflation and the GDP trends through the adjustment of the interest rate to prevent shocks and deviations from the long-run optimal targets. The optimal control path for the monetary instrument, the interest rate, is the result of a dynamic minimization problem in a continuous-time fashion. The model allows considering various economic dynamics ranging from hyperinflation to disinflation, sustained growth and recession. The outcomes provide useful monetary policy insights and reveal the dilemma between objectives faced by the monetary authority in trade-off scenarios.
This paper uses a differential game approach to investigate a model that represents the exploitation of groundwater, taking into account the strategic and dynamic interactions among users of the resource and public authority. Agents' behaviour may influence their gains but also the overexploitation of the aquifer. The effects of legal and illegal firms' actions and the contribution of taxes and penalties imposed by public authorities, are analysed by studying Feedback equilibria in order to capture the problem of non-compliance with resource management regimes and to discuss policy options in a non-cooperative and cooperative context. We show that illegal extractions can be a significant stumbling block on the path towards implementing of better management and environmental policies and we explain how, in order to fight this phenomenon, the public authority must increase controlled activity rather than taxation, but also encourage cooperation between legal firms under appropriate conditions.
It is well known that regulation and efficiency are two important issues on banking literature. The goal of the paper is to analyse them through a banking duopoly model with heterogeneous expectations. To this purpose, we consider two scenarios. In the first one, we focus on regulation effects. In particular, empirical literature on Italian banks finds evidence on the asymmetry of the costs of regulation that penalize small banks with respect to the large ones. In this direction, we analyse a duopoly model where small banks and large banks have different forecasting rules and we capture the differences of the regulations' effects assuming asymmetry in the cost functions. We introduce linear cost function for small banks and quadratic cost function for large banks. In the second scenario, we study the relation between regulation and bank efficiency highlighting empirical results showing that large banks register higher level of inefficiency than small banks. Moreover, in order to stress new evidences and to confirm empirical results on banking regulation and efficiency, we conduct an analytical and numerical analysis.
This research develops a continuous-time optimal growth model that accounts for population dynamics resembling the historical pattern of the demographic transition. The Ramsey model then becomes able to generate multiple determinate or indeterminate stationary equilibria and explain the process of the transition from a state with high fertility and low income per capita to a state with low fertility and high income per capita. The article also investigates the emergence of damped or persistent cyclical dynamics.
We study behavioral change - as a transition between coexisting attractors - in the context of a stochastic, non-linear consumption model with interdependent agents. Relying on the indirect approach to the analysis of a stochastic dynamic system, and employing a mix of analytical, numerical and graphical techniques, we identify conditions under which such transitions are likely to occur. The stochastic analysis depends crucially on the stochastic sensitivity function technique as it can be applied to the stochastic analoga of closed invariant curves [
We analyze a purely dynamic model of public debt stabilization under ambiguity. We assume that the debt to GDP ratio is described by a random variable, and thus it can be characterized by investigating the evolution of its density function through iteration function systems on mappings. Ambiguity is associated with parameter uncertainty which requires policymakers to respond to such an additional layer of uncertainty according to their ambiguity attitude. We describe ambiguity attitude through a simple heuristic rule in which policymakers adjust the available vague information (captured by the empirical distribution of the debt ratio) with a measure of their ignorance (captured by the uniform distribution). We show that such a model generates fractal-type objects that can be characterized as fixed-point solutions of iterated function systems on mappings. Ambiguity is a source of unpredictability in the long run outcome since it introduces some singularity features in the steady state distribution of the debt ratio. However, the presence of some ambiguity aversion removes such unpredictability by smoothing out the singularities in the steady state distribution.
A three-delay duopoly is considered where the firms have identical implementation delays with different information delays. The equilibrium is locally asymptotically stable without delays however this stability is lost with increasing values of the delays. The stability properties of the equilibrium depend on the common implementation delay of the firms and on the sum of the two information delays. The stability switching curves are first analytically characterized and illustrated, and then the direction of the stability switching is determined at each point of the curves. The possibility of multiple pure imaginary eigenvalues is also discussed when the directions of the stability switches cannot be determined. Simulation examples illustrate the theoretical results.
This paper rigorously examines the (in)stability of limit cycles generated by Hopf bifurcations in a medium-term Keynesian model. The bifurcation equation of the model is derived and the conditions for stable and unstable limit cycles are presented. Numerical simulations are performed to illustrate the analytical results.
We study a simple financial market model with interacting chartists and fundamentalists that may give rise to multiband chaotic attractors. In particular, asset prices fluctuate erratically around their fundamental values, displaying a significant bull and bear market behavior. An in-depth analytical and numerical study of our model furthermore reveals the emergence of a new bifurcation structure, a phenomenon that we call a bandcount accretion bifurcation structure. The latter consists of regions associated with chaotic dynamics only, the boundaries of which are not defined by homoclinic bifurcations, but mainly by contact bifurcations of particular type where two distinct critical points of certain ranks coincide.
The Eastern cottontail Sylvilagus floridanus is a lagomorph native to North America, introduced in Italy since the 1960s. In Central and Northern Italy, the cottontail overlaps its range with the native European hare Lepus europaeus and affects the predator-prey dynamics of native hares and foxes. Field data indicate that the cottontail is susceptible to infection by the European brown hare syndrome (EBHS) virus. Although the real role of cottontails and native foxes in the spreading of EBHS viruses is yet uncertain, we present a cottontail-hare-fox model including possible effects of EBHS, imported by foxes, through environmental contamination. A rather complete map of the possible system equilibria and their mutual relationship and transition is established.
This paper analyses a three-country, fixed exchange rates Kaldorian nonlinear macroeconomic model of business cycles. The countries are connected through international trade, and international capital movement with imperfect capital mobility. Our model is a continuous time version of the discrete time three-country Kaldorian model of Inaba and Asada [
Add your name and e-mail address to receive news of forthcoming issues of this journal:
[Back to Top]