Asset price dynamics in a financial market with fundamentalists and chartists

Carl Chairella, Roberto Dieci and Laura Gardini ()
Authors registered in the RePEc Author Service: Carl Chiarella

Discrete Dynamics in Nature and Society, 2001, vol. 6, 1-31

Abstract:

In this paper we consider a model of the dynamics of speculative markets involving the interaction of fundamentalists and chartists. The dynamics of the model are driven by a two-dimensional map that in the space of the parameters displays regions of invertibility and noninvertibility. The paper focuses on a study of local and global bifurcations which drastically change the qualitative structure of the basins of attraction of several, often coexistent, attracting sets. We make use of the theory of critical curves associated with noninvertible maps, as well as of homoclinic bifurcations and homoclinic orbits of saddles in regimes of invertibility.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnddns:528706

DOI: 10.1155/S1026022601000103

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