Bifurcation Analysis in Economic System Dynamics

Abstract

This paper discusses the role of investment on dynamics of micro-economic in nonlinear financial model. The interest rate, investment demand and price index are modeled with the help of saving amount, cost per investment and demand elasticity of commercial markets, all these parameters are considered as positive. Using bifurcation theory, bifurcation point and time period is studied for the financial system. Through numerical methods, it is observed that the value of time bifurcation decreases as investment demand decreases, further the time bifurcation decreases with the investment demand parameter and elasticity of commercial markets. It is concluded that the bifurcation analysis depends on the value of investment demand and also on the elasticity of commercial markets parameter.