Oscillations in some nonlinear economic relationships

In this paper we consider a simple family of nonlinear dynamical systems generated by smooth functions. Some theorems for the existence and the uniqueness of the limit cycles of the systems are presented. If f and g are generating functions with unique limit cycles and xf(x) < xg(x), for all x ≠ 0, then according to the ‘bounding theorem’ proved in the paper, the limit cycle of the system generated by f is bounded by the limit cycle of the system generated by g. This gives us a method to estimate the amplitude of the oscillations also for systems for which we do not know the generating function exactly. As an application we extend the nonlinear business cycle model proposed by Tönu Puu (1989).