Hommes, C. (1993). Periodic, almost periodic and chaotic behaviour in Hicks' non-linear trade cycle model Economics Letters, 41(4):391--397.
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Affiliated author
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Publication year1993
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JournalEconomics Letters
Hicks' non-linear trade cycle model is an unstable multiplier-accelerator model together with an {\textquoteleft}income ceiling{\textquoteright} and an {\textquoteleft}investment floor{\textquoteright}. We show that in the simplest, two-dimensional version of the model the income time paths are always regular: either periodic or almost periodic (quasi-periodic) behaviour occurs. When consumption and/or investment is distributed over several time periods, higher dimensional versions of the model are obtained. We show that in the three-dimensional Hicks model irregular, chaotic income time paths may occur.