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Optimal ergodic chaos under slow capital depreciation

Authors


  • This research was supported by the Grant-in-Aid for Specially Promoted Research #23000001, JSPS, and the Global COE program “Raising Market Quality - Integrated Design of Market Infrastructure,” MEXT, Japan.

Email: yano@kier.kyoto-u.ac.jp

Abstract

It has been known that, in a standard two-sector dynamic model, slow capital depreciation may result in a unimodal system with a kinked peak and that this system may be topological chaos, which is unobservable in Grandmont's sense. However, whether or not slow capital depreciation can cause observable chaos has not been examined in the existing literature. The present study demonstrates that slow capital depreciation may cause ergodic chaos, which is observable, by using a recent result of Sato and Yano (2012).

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