ABSTRACT
During the 1950's and 1960's the only well-developed effort to use nonlinear techniques in the study of dynamic economic processes is associated with Richard Goodwin. He put forward the idea of illustrating persistent, deterministic oscillations within a multiplier-accelerator setup by means of a limit cycle for a nonlinear, two-dimensional flow. The author claims the existence of cycles and chaos but nothing precise is actually proven. In fact, the late 1960's and 1970's witnessed an almost complete unanimity on the use of linear-stochastic models in order to understand business cycles. Growth models appear to be particularly well suited to provide examples of economic chaos. Stutzer M., in turn, had already considered the growth model of Haavelmo and translated it in a discrete-time version that, again, was homeomorphic to the quadratic map. A variety of different economic models have been considered in order to show that they could admit, under reasonable hypotheses, chaotic outcomes.
