Deterministic chaos and catastrophes in business cycle theory
Wydział Nauk Ekonomicznych i Zarządzania UMK w Toruniu, ul. Gagarina 13a, Toruń 87-100, Poland
The primary thesis of the paper is that a general systems theory provides a perfect basis for conducting all kinds of comparisons in the theory of business cycles, and it also enables its further development. A cognitive aim was to show that applying the theory of bifurcations and morphogenesis in the domain of economic fluctuations allows constructing models of the cycle with greater explicatory and utility values than there were so far. In this way, the precision and consistency of the theory increases. In this field the great weight have the applications of catastrophe theory. Another fact was indicated that the discovery of deterministic chaos places the issues of explanation and forecasting in economics in a totally different light. The practical objective was to prove that under some circumstances predicting becomes impossible. Every nonlinear chaotic system is characterized by its own predictability horizon which cannot be surpassed. This, in turn, limits the effectiveness of traditional economic policy.
Presentation: Oral at 4 Ogólnopolskie Sympozjum "Fizyka w Ekonomii i Naukach Społecznych", by Aleksander Jakimowicz
See On-line Journal of 4 Ogólnopolskie Sympozjum "Fizyka w Ekonomii i Naukach Społecznych"
Submitted: 2009-03-25 22:38 Revised: 2009-06-07 00:48