Robust Ergodic Chaos in Discounted Dynamic Optimization Models.

We identify a family of discounted dynamic optimization problems in which the immediate return function depends on current consumption, capital input and a taste parameter. The usual monotonicity and concavity assumptions on the return functions and the aggregative production function are verified. it is shown that the optimal transition functions are represented by the "quadratic family," well-studied in the literature on chaotic dynamical systems. Hence, Jakobson's theorem can be used to throw light on the issues of robustness of ergodic chaos and sensitive dependence on initial conditions.