Crisis-Induced Intermittency in Nonlinear Economic Cycles

Abstract

In this chapter, a new type of economic intermittency is found in nonlinear business cycles. Following a merging crisis, a complex economic system has the ability to retain memory of its weakly chaotic dynamics prior to crisis. The resulting time series exhibits episodic regime switching between periods of weakly and strongly chaotic fluctuations of economic variables. The characteristic intermittency time, useful for forecasting the average duration of contractionary phases and the turning point to the expansionary phase of business cycles, is computed from the simulated time series.