Analysis and control of bifurcations in continuous time macroeconomic systems

We investigate bifurcation phenomena in the Bergstrom-Nowman-Wymer (1992) continuous time macroeconometric model of the United Kingdom. Both transcritical and Hopf bifurcations are considered with this model within the model´s region of plausible parameter settings. Hopf bifurcations are particularly useful since they may provide explanations for some cyclical phenomena in the macroeconomy. Numerical algorithms are designed to locate the bifurcation boundaries. To the best of our knowledge, this is the first work on numerical determination of bifurcation boundaries for large scale macroeconomic systems. A notable and perhaps surprising fact is that both types of bifurcations can coexist with this well-regarded UK model-in the same neighborhood of the parameter space. Effect of the usual fiscal policy control on bifurcations is also examined