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 language | English |
|---|---|
| Pages (from-to) | 909-934 |
| Number of pages | 26 |
| Journal | Journal of Economic Dynamics and Control |
| Volume | 24 |
| Issue number | 5-7 |
| DOIs | |
| Publication status | Published - Jun 2000 |
| Externally published | Yes |
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