1. Stabilizing chaos in a dynamic macroeconomic model
- Author
-
Leo Kaas
- Subjects
Stabilization policy ,Organizational Behavior and Human Resource Management ,Economics and Econometrics ,Chaotic dynamical systems ,General equilibrium theory ,jel:E32 ,E62 ,Disequilibrium ,Nonlinear system ,Macroeconomic model ,Nonlinear dynamics ,Income tax ,ddc:330 ,Economics ,medicine ,medicine.symptom ,Mathematical economics ,Controlling chaos ,Control methods ,Disequilibrium models - Abstract
Within a macroeconomic disequilibrium model it turns out that stationary and simple adaptive policies are not capable of stabilizing efficient steady states and lead to periodic or irregular fluctuations for large sets of policy parameters. The application of recent control methods for chaotic dynamical systems shows that the government can, in principle, stabilize an unstable Walrasian equilibrium in a short time by varying income tax rates or government expenditures. Different stabilizing policies are analyzed and compared with regard to their efficiency.
- Published
- 1998
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