The dynamics of the NAIRU model with two switching regimes

Fabio Tramontana, Laura Gardini () and P. Ferri

Journal of Economic Dynamics and Control, 2010, vol. 34, issue 4, 681-695

Abstract: 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.

Keywords: Phillips; curve; Regime; switching; NAIRU; Nonlinearities; Discontinuous; maps (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:34:y:2010:i:4:p:681-695

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