This paper shows that chaotic dynamics and global indeterminacy may characterize the Lucas(1988)endogenous growth model in its local determinacy region of the parameter space. This is achieved by means of the Shilnikov(1965)theorem, which exploits the existence of a family of homoclinic orbits doubly asymptotic to the balanced growth path, when it is a saddle-focus. The economic implications of these results are also discussed.

Shilnikov chaos in the Lucas model of endogenous growth

BELLA, GIOVANNI;MATTANA, PAOLO;VENTURI, BEATRICE
2017-01-01

Abstract

This paper shows that chaotic dynamics and global indeterminacy may characterize the Lucas(1988)endogenous growth model in its local determinacy region of the parameter space. This is achieved by means of the Shilnikov(1965)theorem, which exploits the existence of a family of homoclinic orbits doubly asymptotic to the balanced growth path, when it is a saddle-focus. The economic implications of these results are also discussed.
2017
Lucas model; Shilnikov chaos; global indeterminacy; history versus expectations
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11584/223521
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