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Mode‐locking and entrainment of endogenous economic cycles
Author(s) -
Haxholdt Christian,
Kampmann Christian,
Mosekilde Erik,
Sterman John D.
Publication year - 1995
Publication title -
system dynamics review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.491
H-Index - 57
eISSN - 1099-1727
pISSN - 0883-7066
DOI - 10.1002/sdr.4260110302
Subject(s) - intermittency , robustness (evolution) , period doubling bifurcation , aggregate (composite) , mode (computer interface) , amplitude , entrainment (biomusicology) , economics , oscillation (cell signaling) , computer science , statistical physics , nonlinear system , bifurcation , physics , mechanics , materials science , biochemistry , chemistry , genetics , composite material , quantum mechanics , biology , rhythm , acoustics , turbulence , gene , operating system
Abstract We explore the robustness of aggregation in Sterman's model of the economic long wave. The original model aggregates all capital‐producing firms into a single sector and generates a large‐amplitude self‐sustained oscillation with a period of roughly 50 years. We disaggregate the model into two coupled industries, one representing production of plant and long‐lived infrastructure and the other representing short‐lived equipment and machinery. While holding the aggregate equilibrium characteristics of the model constant, we investigate how mode‐locking occurs as a function of the difference in capital lifetimes and the strength of the coupling between the sectors. Disaggregation allows new modes of behavior to arise: In addition to mode‐locking, we observe cascades of period‐doubling bifurcations, chaos, intermittency, and quasi‐periodic behavior. Despite the introduction of these additional modes, the basic behavior of the model is robust to the aggregation assumption. We consider the likely effects of finer disaggregation, the introduction of additional coupling mechanisms, such as prices, and other avenues for the exploration of aggregation in system dynamics models.