Computing Economic Chaos
Richard H. Day
University of Southern California - Department of Economics
Oleg V. Pavlov
Worcester Polytechnic Institute (WPI) - Department of Social Science & Policy Studies
Computational Economics. Vol. 23, No. 4, pp. 289-301, 2004
Existence theory in economics is usually in real domains such as the findings of chaotic trajectories in models of economic growth, tatonnement, or overlapping generations models. Computational examples, however, sometimes converge rapidly to cyclic orbits when in theory they should be nonperiodic almost surely. We explain this anomaly as the result of digital approximation and conclude that both theoretical and numerical behavior can still illuminate essential features of the real data.
Number of Pages in PDF File: 18
Keywords: Chaos, computer-generated chaos, computational approximation, tent map
JEL Classification: C61, C63, C88Accepted Paper Series
Date posted: September 23, 2005
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