Control of chaotic dynamics in an OLG economic model

Detalhes bibliográficos
Autor(a) principal: Mendes, D. A.
Data de Publicação: 2005
Outros Autores: Mendes, V.
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: https://ciencia.iscte-iul.pt/id/ci-pub-25414
http://hdl.handle.net/10071/14224
Resumo: This paper deals with the control of chaotic economic motion. We show that very complicated dynamics arising, e.g., from an overlapping generations model (OLG) with production and an endogenous intertemporal decision between labour and leisure, which produces chaos, can in fact be controlled with relative simplicity. The aperiodic and very complicated motion that stems from this model can be subject to control by small perturbations in its parameters and turned into a stable steady state or into a regular cycle. Therefore, the system can be controlled without changing of its original properties. To perform the control of the totally unstable equilibrium (both eigenvalues with modulus greater than unity) in this economic model we apply the pole-placement technique, developed by Romeiras, Grebogi, Ott and Dayawansa (1992). The application of control methods to chaotic economic dynamics may raise serious reservations, at least on mathematical and logical grounds, to some recent views on economics which have argued that economic policy becomes useless in the presence of chaotic motion (and thus, that the performance of the economic system cannot be improved by public intervention, i.e., that the amplitude of cycles can not be controlled or reduced). In fact, the fine tuning of the system (that is, the control) can be performed without having to rely only on infinitesimal accuracy in the perturbation to the system, because the control can be performed with larger or smaller perturbations, but neither too large (because these would lead to a different fixed point of the system, therefore modifying its original nature), nor too small because the control becomes too inefficient.
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spelling Control of chaotic dynamics in an OLG economic modelChaos controlOLG modelThis paper deals with the control of chaotic economic motion. We show that very complicated dynamics arising, e.g., from an overlapping generations model (OLG) with production and an endogenous intertemporal decision between labour and leisure, which produces chaos, can in fact be controlled with relative simplicity. The aperiodic and very complicated motion that stems from this model can be subject to control by small perturbations in its parameters and turned into a stable steady state or into a regular cycle. Therefore, the system can be controlled without changing of its original properties. To perform the control of the totally unstable equilibrium (both eigenvalues with modulus greater than unity) in this economic model we apply the pole-placement technique, developed by Romeiras, Grebogi, Ott and Dayawansa (1992). The application of control methods to chaotic economic dynamics may raise serious reservations, at least on mathematical and logical grounds, to some recent views on economics which have argued that economic policy becomes useless in the presence of chaotic motion (and thus, that the performance of the economic system cannot be improved by public intervention, i.e., that the amplitude of cycles can not be controlled or reduced). In fact, the fine tuning of the system (that is, the control) can be performed without having to rely only on infinitesimal accuracy in the perturbation to the system, because the control can be performed with larger or smaller perturbations, but neither too large (because these would lead to a different fixed point of the system, therefore modifying its original nature), nor too small because the control becomes too inefficient.Institute of Physics Publishing2017-08-01T16:05:07Z2005-01-01T00:00:00Z20052017-08-01T16:04:04Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttps://ciencia.iscte-iul.pt/id/ci-pub-25414http://hdl.handle.net/10071/14224eng1742-658810.1088/1742-6596/23/1/019Mendes, D. A.Mendes, V.info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-11-09T18:02:11Zoai:repositorio.iscte-iul.pt:10071/14224Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T22:33:27.895636Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Control of chaotic dynamics in an OLG economic model
title Control of chaotic dynamics in an OLG economic model
spellingShingle Control of chaotic dynamics in an OLG economic model
Mendes, D. A.
Chaos control
OLG model
title_short Control of chaotic dynamics in an OLG economic model
title_full Control of chaotic dynamics in an OLG economic model
title_fullStr Control of chaotic dynamics in an OLG economic model
title_full_unstemmed Control of chaotic dynamics in an OLG economic model
title_sort Control of chaotic dynamics in an OLG economic model
author Mendes, D. A.
author_facet Mendes, D. A.
Mendes, V.
author_role author
author2 Mendes, V.
author2_role author
dc.contributor.author.fl_str_mv Mendes, D. A.
Mendes, V.
dc.subject.por.fl_str_mv Chaos control
OLG model
topic Chaos control
OLG model
description This paper deals with the control of chaotic economic motion. We show that very complicated dynamics arising, e.g., from an overlapping generations model (OLG) with production and an endogenous intertemporal decision between labour and leisure, which produces chaos, can in fact be controlled with relative simplicity. The aperiodic and very complicated motion that stems from this model can be subject to control by small perturbations in its parameters and turned into a stable steady state or into a regular cycle. Therefore, the system can be controlled without changing of its original properties. To perform the control of the totally unstable equilibrium (both eigenvalues with modulus greater than unity) in this economic model we apply the pole-placement technique, developed by Romeiras, Grebogi, Ott and Dayawansa (1992). The application of control methods to chaotic economic dynamics may raise serious reservations, at least on mathematical and logical grounds, to some recent views on economics which have argued that economic policy becomes useless in the presence of chaotic motion (and thus, that the performance of the economic system cannot be improved by public intervention, i.e., that the amplitude of cycles can not be controlled or reduced). In fact, the fine tuning of the system (that is, the control) can be performed without having to rely only on infinitesimal accuracy in the perturbation to the system, because the control can be performed with larger or smaller perturbations, but neither too large (because these would lead to a different fixed point of the system, therefore modifying its original nature), nor too small because the control becomes too inefficient.
publishDate 2005
dc.date.none.fl_str_mv 2005-01-01T00:00:00Z
2005
2017-08-01T16:05:07Z
2017-08-01T16:04:04Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv https://ciencia.iscte-iul.pt/id/ci-pub-25414
http://hdl.handle.net/10071/14224
url https://ciencia.iscte-iul.pt/id/ci-pub-25414
http://hdl.handle.net/10071/14224
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv 1742-6588
10.1088/1742-6596/23/1/019
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eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Institute of Physics Publishing
publisher.none.fl_str_mv Institute of Physics Publishing
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
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