An example of intermittency in nonlinear economic cycles

Abstract

Intermittent behaviour of economic dynamics is studied by a nonlinear model of business cycles. Numerical simulations show that after an economic system evolves from order to chaos, the system keeps its memory before the transition and its time series alternates episodically between periods of low-level (quiescent) and high-level (bursting) activities. This model of economic intermittency exhibits power-law spectrum similar to the nonlinear time series observed in financial markets.

Acknowledgements

This work is supported by CNPq and forms part of Ph.D. Thesis in Economics by A.C.-L. Chian at the University of Adelaide.