Nonlinear Dynamics and Chaos in Optimal Growth: An Example.

This study demonstrates the possibility of ergodically chaotic optimal accumulation in the case in which future utilities are discounted arbitrarily weakly. For this purpose, the authors use a two-sector model with Leontief production functions and construct a condition under which the optimal transition function is unimodal and expansive. They demonstrate that the set of parameter values satisfying that condition is nonempty no matter how weakly the future utilities are discounted. Copyright 1995 by The Econometric Society.