Beatrice Venturi

The double scroll chaotic attractor in the dynamics of a fixed-price IS-LM model

With the aim of exploring the conditions which determine a chaotic behavior in the long-run properties of an economic model, this paper innovates the existing Keynesian macroeconomic literature by showing that the dynamics of the well-known IS-LM model may generate a double-scroll strange attractor, for a particular set of structural parameters.

Shilnikov chaos in the Lucas model of endogenous growth

This paper shows that chaotic dynamics and global indeterminacy may characterize the Lucas (1988) endogenous growth model in its local determinacy region of the parameter space. This is achieved by means of the Shilnikov (1965) theorem, which exploits the existence of a family of homoclinic orbits doubly asymptotic to the balanced growth path, when it is a saddle-focus. The economic implications of these results are also discussed.

Bifurcation and Sunspots in Continuous Time Optimal Model with Externalities

In this chapter, we construct sunspot equilibria in a class of continuous time optimal control models with externalities. The model possesses stochastic characteristics which arise from indeterminate equilibrium and cycles (Hopf cycles) closed to the steady state. The model undergoes to Hopf bifurcations in some parameters set. We construct a stationary sunspot equilibrium near the closed orbit. We show that the stochastic approach suggests a way out from the poverty environments trap in a natural resource optimal model.

The Effect of Uncertainty on Production-Inventory Policies With Environmental Considerations

We consider a manufacturing firm whose production is characterized by polluting emissions, an incorporated pollution abatement process, and continuous-time inventory control. Recognizing the stochastic nature of both pollution and inventory dynamics, we study the impact of consumer demand and pollution uncertainty on production-inventory policies under environmental costs/taxes imposed on the manufacturer. We find that the manufacturer, facing environmental uncertainty, reduces both inventory and pollution levels in the long run. The same effect is observed in terms of inventories under proportional and progressively growing environmental taxes but not necessarily in terms of pollution. In particular, emission taxes most impact expected steady-state inventories while ambient pollution taxes combat long-run pollution levels.

Kaldorian Assumptions and Endogenous Fluctuations in the Dynamic Fixed-Price IS-LM Model

With the aim of better understanding the conditions which determine endogenous fluctuations at business cycle frequencies, recent literature has revived interest in the Schinasi’s variant of the dynamic, intermediate-run, IS-LM model (Schinasi 1981, 1982). Results, however, remain confined to Kaldorian-type economies, namely to those economies which present a greater-than-unity marginal propensity to spend out of income. This paper contributes to the debate by showing that, in the case of a negative interest rate sensitivity of savings, stable endogenous cycles can actually emerge as equilibrium solutions of the model also in the case of non Kaldorian-type economies. To this end, we combine the instruments of the global analysis, specifically the homoclinic bifurcation Theorem of Kopell and Howard (1975), with numerical methods.