Stability and chaos analysis in dynamic economic systems with application to the Panamanian economy

Abstract

The objective of this article is to analyze the Panamanian economic growth cycle from the perspective of chaotic economic dynamics. For this purpose, the mathematical theory of chaos is highlighted as a tool for the study of dynamic systems whose behavior changes over time. Consequently, we study the economic models of Solow and Hicks whose influence is of great importance for the analysis of the behavior of any economy. Since an approach of this nature related to the Panamanian economy has not been found in the literature, this work constitutes the first treatment of economic dynamics from the perspective of dynamic systems. However, although a number of economic models can be found that address this approach, reference will be made to Solow and Hicks' economic models to analyze the behavior of the Panamanian economy in the framework of chaos theory. The results that we have obtained are very useful since they can be used to make the pertinent adjustments in economic policy, focused mainly on the achievement of the welfare of the Panamanian people.                                                 Finally, with the use of technological tools for computation, a model is developed to detect the chaotic behavior of the Panamanian economy.