Keynesian Chaos.

Abstract

This paper shows how chaotic fluctuations can emerge in a dynamic version of the standard fixprice macroeconomic model. The crucial parameters involved induced investment and its sensitivity to interest rates. We use some ideas from the theory of chaos and from ergodic theory to illustrate the fact that apparently random trajectories need not be rare. The paper concludes with some tantalizing hints at how insights on monetary theory and policy might change when comparative dynamics rather than comparative statics are used and when nonlinearities of the kind illustrated in the paper prevail.

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Document Details

Document Type
Technical Report
Publication Date
Jul 01, 1983
Accession Number
ADA132836

Entities

People

  • Richard H. Day
  • Wayne Shafer

Organizations

  • University of Wisconsin–Madison

Tags

Communities of Interest

  • C4I
  • Materials and Manufacturing Processes

DTIC Thesaurus Topics

  • Business Administration
  • Difference Equations
  • Differential Equations
  • Economics
  • Equations
  • Ergodic Processes
  • Investments
  • Mathematics
  • Money
  • New York
  • Nonlinear Dynamics
  • Nonlinear Systems
  • Probability
  • Random Variables
  • Standards
  • Stochastic Processes
  • United States

Fields of Study

  • Economics

Readers

  • Control Systems Engineering.
  • Economics
  • Theoretical Analysis.