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Recurrence quantification analysis on a Kaldorian business cycle model

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Abstract

Business cycles denote oscillations in economy as a result of downturns and expansions. The macroeconomic variable under our investigation is income as derived by the dynamic interaction with capital, consumption and investment. In this paper, a Kaldorian business cycle model is used to simulate real dynamics so that nonlinear techniques such as recurrence quantification analysis, Poincaré Plot and related quantifiers can be applied. Analysis of chaos brings evidences on fractal dimension and entropy measures for both real data and model’s simulations. The final goal is to discover whether real and simulated business cycle dynamics have similar characteristics and validate the model as a suitable tool to simulate reality.

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Acknowledgements

The authors are very grateful to the antonymous referees for their feedbacks and recommendations. Special thanks go to Carlo Lucheroni (University of Camerino) for his comments.

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Authors and Affiliations

  1. Department of Economics and Finance, Università degli Studi di Bari “Aldo Moro”, Via C. Rosalba 53, 70124, Bari, Italy

    Giuseppe Orlando

  2. School of Science and Technologies, Università degli Studi di Camerino, Via M. delle Carceri 9, 62032, Camerino, Italy

    Giuseppe Orlando

  3. eCampus University, Via Matera 18, 00182, Rome, Italy

    Giovanna Zimatore

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  1. Giuseppe Orlando
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Correspondence to Giuseppe Orlando.

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Orlando, G., Zimatore, G. Recurrence quantification analysis on a Kaldorian business cycle model. Nonlinear Dyn 100, 785–801 (2020). https://doi.org/10.1007/s11071-020-05511-y

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