Fractional Dynamics and Pseudo-Phase Space of Country Economic Processes

José A. Tenreiro Machado, Maria Eugénia Mata and António M. Lopes
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José A. Tenreiro Machado: Department of Electrical Engineering, Institute of Engineering, Polytechnic of Porto, R. Dr. António Bernardino de Almeida, 431, 4249-015 Porto, Portugal
Maria Eugénia Mata: Nova SBE, Nova School of Business and Economics (Faculdade de Economia, Universidade Nova de Lisboa), Rua da Holanda, 1, 2775-405 Carcavelos, Portugal
António M. Lopes: UISPA-LAETA/INEGI, Faculty of Engineering, University of Porto, Rua Dr. Roberto Frias, 4200-465 Porto, Portugal

Mathematics, 2020, vol. 8, issue 1, 1-17

Abstract: In this paper, the fractional calculus (FC) and pseudo-phase space (PPS) techniques are combined for modeling the dynamics of world economies, leading to a new approach for forecasting a country’s gross domestic product. In most market economies, the decline of the post-war prosperity brought challenging rivalries to the Western world. Considerable social, political, and military unrest is today spreading in major capital cities of the world. As global troubles including mass migrations and more abound, countries’ performance as told by PPS approaches can help to assess national ambitions, commercial aggression, or hegemony in the current global environment. The 1973 oil shock was the turning point for a long-run crisis. A PPS approach to the last five decades (1970–2018) demonstrates that convergence has been the rule. In a sample of 15 countries, Turkey, Russia, Mexico, Brazil, Korea, and South Africa are catching-up to the US, Canada, Japan, Australia, Germany, UK, and France, showing similarity in many respects with these most developed countries. A substitution of the US role as great power in favor of China may still be avoided in the next decades, while India remains in the tail. The embedding of the two mathematical techniques allows a deeper understanding of the fractional dynamics exhibited by the world economies. Additionally, as a byproduct we obtain a foreseeing technique for estimating the future evolution based on the memory of the time series.

Keywords: fractional calculus; pseudo-phase space; economy; system modeling (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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