Chaotic dynamics in a monetary economy with habit persistence
Resource
Journal of Economic Behavior and Organization, 65(2), 245-260
Journal
Journal of Economic Behavior and Organization
Journal Volume
65
Journal Issue
2
Pages
245-260
Date Issued
2008
Author(s)
Abstract
This paper develops a cash-in-advance model for persistent habits of consumption. With a binding cash-in-advance constraint, the economic transition can be represented by a one-dimensional or two-dimensional dynamical system, depending on persistent habits of only cash-goods consumption or both cash-goods and credit-goods consumption, respectively. We verify the existence of entropic chaos and ergodic chaos for the former case and identify the presence of entropic chaos for the latter. © 2006 Elsevier B.V. All rights reserved.
SDGs
Type
journal article
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