Chaotic solutions in non linear economic-financial models

Bella, Giovanni.;Mattana, Paolo;Venturi, Beatrice.

2013-01-01

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Abstract

In this paper we prove the existence of a homoclinic orbit in a New Kenesian model. More in detail, by the undetermined coefficient method, we analytically demonstrate that there exists a homoclinic orbit of a Silnikov type. Furthermore, on the basis of the Shilnikov Theorem Assumptions, we find that Smale horseshoe chaos occurs both theoretically and numerically. The economic implications of this analysis are finally discussed. Keywords: Endogenous Growth, Optimality condition, Stability, Instability, Deterministic cycles; Homoclinic orbits