Chaotic dynamics in a two-dimensional overlapping generations model

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Abstract

This paper investigates the global dynamics of a two-dimensional Diamond-type overlapping generations model extended to allow for government intervention. Using a singular perturbation method, we identify conditions under which transverse homoclinic points to the golden rule steady state are generated. For a parametric example with a CES production function, the occurrence of complicated dynamics (e.g. strange attractors) associated with homoclinic bifurcations is demonstrated.

Original languageEnglish
Pages (from-to)909-934
Number of pages26
JournalJournal of Economic Dynamics and Control
Volume24
Issue number5-7
DOIs
Publication statusPublished - Jun 2000
Externally publishedYes

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Keywords

  • 2-D OLG model
  • Coexisting attractors
  • E32
  • Homoclinic point
  • Horseshoe
  • Strange attractor

ASJC Scopus subject areas

  • Economics and Econometrics
  • Control and Optimization
  • Applied Mathematics

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