Nonlinear Dynamics, Psychology, and Life Sciences, Vol. 13, Iss. 3, July, 2009, pp. 327-340
@2009 Society for Chaos Theory in Psychology & Life Sciences

 
 
 

Chaos and Chaotic Dynamics in Economics

Marisa Faggini, University of Salerno, Fisciano, Italy

Abstract: Proponents of chaos theory attempted to articulate a new, more realistic, scientific world-view contradictory to the fundamental notions of the Newtonian view of science. Nonlinearity and chaos give the opportunity of a reconciliation of economics with a more realistic representation of its phenomena. Chaos theory represents a means for enhancing both the methodological and theoretical foundations for exploring the complexity of economic phenomena. This paper offers an overview of the applications of chaos theory in economics highlighting that recognizing the existence of deterministic chaos in economics is important from both a theoretical and practical point of view.

Keywords: chaos, economic models, time-series analysis, nonlinearity, control systems