The Qualitative Analysis of Nonlinear Dynamic Economic Systems by Structural Methods

Abstract

This chapter presents the qualitative analysis of nonlinear dynamic economic systems by structural methods. It presents a technique already developed for the analysis of the structural considerations of the behavior and operation of macro-economic systems. It involves mapping of the structural properties into a vector field, which allows the transient motion to be expressed as a resultant of gradient and rotational components. Using this initial framework, the growth and propagation of economic activity can be studied in aggregated systems. There are two prototype equations that characterize the field of nonlinear differential equations; they are the classic oscillators of Van der Pol and Duffing, both of which are structurally stable perturbations of the classic harmonic oscillator.