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Homoclinic Bifurcation and Endogenous Cycles in the Dynamic IS-LM Model

Author

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  • Giovanni Bella

    (Department of Economics and Business, University of Cagliari, Italy)

Abstract

This paper contributes to the new keynesian literature by showing that stable endogenous cycles can emerge as equilibrium solutions of the traditional IS-LM model. The application of the original Bogdanov-Takens theorem allows us to determine the regions of the parametric space where the model exhibits a global indeterminate solution, and a lowgrowth trapping region, characterized by a continuum of equilibrium trajectories in the proximity of a homoclinic bifurcation.

Suggested Citation

  • Giovanni Bella, 2015. "Homoclinic Bifurcation and Endogenous Cycles in the Dynamic IS-LM Model," Journal of Reviews on Global Economics, Lifescience Global, vol. 4, pages 242-250.
    • Handle: RePEc:lif:jrgelg:v:4:y:2015:p:242-250
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    File URL: http://www.lifescienceglobal.com/independent-journals/journal-of-reviews-on-global-economics/volume-4/85-abstract/jrge/1892-abstract-homoclinic-bifurcation-and-endogenous-cycles-in-the-dynamic-is-lm-model
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    More about this item

    Keywords

    Multiple steady states; homoclinic bifurcation; oscillating solutions;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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