SOME NOTES ON THE STRUCTURE OF LIMIT SETS IN IS-LM MODELS

Neri U;MATTANA, PAOLO;BELLA, GIOVANNI;VENTURI, BEATRICE

2010-01-01

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Abstract

SOME NOTES ON THE STRUCTURE OF LIMIT SETS IN IS-LM MODELS By: UMBERTO NERI (DEPARTMENT OF MATHEMATICS, UNIVERSITY OF MARYLAND, COLLEGE PARK, MD, U.S.A.) PAOLO MATTANA, GIOVANNI BELLA AND BEATRICE VENTURI (DEPARTMENT OF ECONOMICS, UNIVERSITY OF CAGLIARI, ITALY) Abstract: We analyze the global dynamics of the solutions of a general non-linear fixed-price disequilibrium IS-LM model, where the investment function avoids any Kaldor type assumption (see Neri and Venturi 2007). The structure of the limit sets of the model is studied. We use rigorous arguments to show that as the bifurcation parameters vary, a wide range of dynamical behavior is displayed. JEL classification: C62, E32. Keywords: deterministic cycles, Hopf bifurcations, stability of periodic orbits, heteroclinic and homoclinic orbits.