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The dynamics of the NAIRU model with two switching regimes

  • Fabio Tramontana

    ()

    (Department of Economics, University of Ancona, Italy)

  • Laura Gardini

    ()

    (Department of Economics and Quantitative Methods, University of Urbino, Italy)

  • Piero Ferri

    ()

    (Department of Economics, University of Bergamo, Italy)

We consider a model of inflation and unemployment proposed in Ferri et al. (JEBO, 2001), in which the dynamics are described by a discontinuous piecewise linear map, made up of two branches. We shall show that the bounded dynamics may be classified in two cases: we may have either regular dynamics with stable cycles of any period or quasiperiodic trajectories, or only chaotic dynamics (pure chaos in which a unique absolutely continuous invariant ergodic measure exists, and structurally stable),in a rich variety of cyclical chaotic intervals. The main results are the analytical formulation of the border collision bifurcation curves, through which we give a complete picture of the possible outcomes of the model.

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File URL: http://www.econ.uniurb.it/RePEc/urb/wpaper/WP_10_04.pdf
File Function: First version, 2010
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Paper provided by University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini in its series Working Papers with number 1004.

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Length: 31 pages
Date of creation: 2010
Date of revision: 2010
Handle: RePEc:urb:wpaper:10_04
Contact details of provider: Web page: http://www.econ.uniurb.it/

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