Synergetic economics. Time and change in nonlinear economics (Q1188826): Difference between revisions

This monograph is concerned with the dynamics of a nonlinear economy in which the economic system may be unstable, and Samuelson's correspondence principle for comparative analysis may not hold. A distinction is made between the perturbation of the initial condition and the stability of the economic system. Economic variables are divided into slow moving and fast moving ones. The analysis is concerned with what happens to the dynamics of the fast moving variables as the slow moving variables reach critical points. The book consists of ten chapters. Chapters 1 and 2 are an introduction to synergetic economics, while Chapter 10 further discusses its implications for economics. Chapter 3 provides the basic theorems in bifurcation and catastrophe theories that are important for synergetic economics. Chapter 4 is concerned with the existence of multiple equilibria and structural changes. Examples are provided to show that multiple equilibria and sudden changes in dynamic behavior (jumps, hysteresis and divergence) may occur as parameters characterizing the economic system are shifted near their critical values. A bifurcation analysis of economic growth is then presented in section 4. Chapter 5 is a study of business cycles. Some mathematical results related to limit cycles are provided in sections 2 and 10. The Hopf bifurcation theorem is applied to the Keynesian Business Cycle à la Chang-Symth, monetary cycles in the Tobin model, oscillations in the hybrid growth model à la van der Ploeg, periodic optimal employment policy, and optimal growth with endogenous fluctuations. Chapter 6 deals with economic chaos in deterministic systems. Periodic optimal growth models and chaos in the international economic model are investigated and the implications of chaos for economic forecasting are discussed. Chapter 7 considers the case where dynamic systems exhibit irregular behavior because of stochastic external noises. Emphasis of the analysis is placed on the effect of the random environment on the deterministic nonlinear system close to critical points. A statistical physics approach is also introduced to explain the Schumpeterian clock. In Chapter 8, attention is shifted to the spatial-temporal economic evolution process. Special attention is placed on the stability and structural changes in the urban pattern formation process. In Chapter 9, the Haken slaving principle and the center manifold theorems are introduced as a way to reduce a higher dimension problem to a lower one and time scale in economic analysis. In view of the structural changes in Eastern Europe and in the Soviet Union, students in economic dynamics will find the topics covered in this monograph both timely and relevant.