Phase Space Reconstruction from Economic Time Series Data: Improving Models of Complex Real-World Dynamic Systems

Ray G. Huffaker

International Journal on Food System Dynamics, 2010, vol. 01, issue 3, 10

Abstract: Failure of economic models to anticipate the global financial crisis illustrates the need for modeling to better capture complex real-world dynamics. Conventional models—in which economic variables evolve toward equilibria or fluctuate about equilibria in response to exogenous random shocks—are ill-equipped to portray complex real-world dynamics in which economic variables may cycle aperiodically along low-dimensional ‘strange attractors’. We present a method developed in the physics literature—‘phase space reconstruction’—that reconstructs strange attractors present in real-world dynamical systems using time series data on a single variable. Phase space reconstruction provides pictures of real-world dynamics that can guide model specification

Keywords: Agribusiness; Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety; Food Security and Poverty; Production Economics; Risk and Uncertainty (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ijofsd:97021

DOI: 10.22004/ag.econ.97021

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