ANALYSIS OF A NON-LINEAR DYNAMIC FINANCIAL SYSTEM

Veronika Novotna, Stanislav Å Kapa and Bernard Neuwirth

Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, 2019, vol. 13, issue 1, 288-297

Abstract: Some of the major trends of the present include the study of various model situations, orientation in simulated conditions, searching for starting points or optimum solutions, etc.; but in modelling complex relationships within economic systems, it is necessary to take into account the time delay in situations where the dynamic behaviour of the model also depends on its previous states. In this article, the authors ana-lyse the dynamic model expressed by a set of non-linear ordinary differential equations with delayed arguments describing the financial system. The aim of the authors is to analyse the behaviour of the dynamic model of the financial system in terms of its solvability and stability in the event that the model takes into account the impact of the history of the demand for investments. It has been proven that under the assumptions given in the article, our task has only one solution, and this solution is continuously differentiable at the interval being investigated. Furthermore, the stability conditions were formulated and a numerical solution for differently set system parameters presented. The authors have demonstrated that the system has a complex dynamic behaviour that is significant-ly affected by the length of the delay of the response to the change in demand for investments; and this is the factor that influences the stability of the system. The results are demonstrated on a specific example, and the behaviour of the model is presented by computer simulation; the Maple system is used to graphically represent the results.

Keywords: asymptotic stability; differential equations; financial system; modelling; simulation (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:rom:mancon:v:13:y:2019:i:1:p:288-297

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