Abstract

This paper illustrates a new tool derived from integrating stochastic and deterministic behaviour. Rather than imposing a stochastic shock on a deterministic model in which only the periodicity is affected, I have built a model in which the random element affects its qualitative behaviour, i.e. its dynamic shape. To do this, I assume that the stochastic shock affects the system and causes it to shift position in space; in other words, built-in shocks affect the behaviour of agents and the dynamic solution of the system. This shift is ultimately responsible for the dynamic behaviour of the model; within this framework, several dynamic solutions are therefore possible, such as convergence to a fixed point, limit cycles, and chaotic behaviour.

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