Habit formation and chaotic dynamics in an n-dimensional cash-in-advance economy
Resource
Nonlinear Dynamics, 58(1-2), 49-62
Journal
Nonlinear Dynamics
Journal Volume
58
Journal Issue
1-2
Pages
49-62
Date Issued
2009
Author(s)
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. © 2009 Springer Science+Business Media B.V.
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Type
journal article
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