Abstract This paper examines the role of bifurcations and chaotic dynamics in economic systems, focusing on how nonlinearities shape the long-term behavior of macroeconomic variables. By employing numerical simulations and analytical methods, we analyze the stability and instability regions of the system, characterize phase space trajectories, and estimate Lyapunov exponents to assess the sensitivity to initial conditions. The study further investigates the impact of parameter variations on bifurcation patterns and the emergence of chaotic regimes. The findings provide insights into the transition from stable equilibria to complex, unpredictable dynamics, with significant implications for economic modeling and policy interventions .
Hugo Spring-Ragain (2025) studied this question.