Economics and Finance


Institutional Reforms in a Region: on the Complexity of Their Evolution

Authors: Georges Sarafopoulos, Panagiotis G. Ioannidis

The paper considers the evolution of institutional reforms in a region during the implementation of a reform, on regional development. For this purpose we use a difference equation. The existence and stability of equilibria are studied. We show that the slope of the tax function may change the stability of equilibrium and cause a structure to behave chaotically. For some values of this parameter there is a locally stable equilibrium which is the value that maximizes the profit function of the local government. Decreasing these values, the equilibrium becomes unstable, through period-doubling bifurcation. The complex dynamics, bifurcations and chaos are displayed by computing numerically Lyapunov numbers and sensitive dependence on initial conditions.

Comments: 11 Pages. Published in The Hellenic Open Business Administration Journal;

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[v1] 2018-07-01 03:46:49

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