Habit formation and chaotic dynamics in an n-dimensional cash-in-advance economy

Hung Ju Chen; Ming-Chia Li

doi:10.1007/s11071-008-9460-1

Habit formation and chaotic dynamics in an n-dimensional cash-in-advance economy

Hung Ju Chen^*, Ming-Chia Li

^*Corresponding author for this work

Department of Applied Mathematics

Research output: Contribution to journal › Article › peer-review

3 Scopus citations

Abstract

This paper investigates the global dynamics of an n-dimensional cash-in-advance model where external habits persist for n periods. We find that habit formation is an important determinant to the dynamic property of the economy and identifies conditions generating entropic chaos. Our results indicate that the possibility of chaotic motion increases with the depreciation rate of habits.

Original language	English
Pages (from-to)	49-62
Number of pages	14
Journal	Nonlinear Dynamics
Volume	58
Issue number	1-2
DOIs	https://doi.org/10.1007/s11071-008-9460-1
State	Published - 1 Oct 2009

Keywords

Cash-in-advance economy
Chaos
Persistent habit

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AB - This paper investigates the global dynamics of an n-dimensional cash-in-advance model where external habits persist for n periods. We find that habit formation is an important determinant to the dynamic property of the economy and identifies conditions generating entropic chaos. Our results indicate that the possibility of chaotic motion increases with the depreciation rate of habits.

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Habit formation and chaotic dynamics in an n-dimensional cash-in-advance economy

Abstract

Keywords

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