Modeling of Macroeconomics by a Novel Discrete Nonlinear Fractional Dynamical System. (8th December 2013)

• Record Type: Journal Article
• Authors: Hu, Zhenhua; Chen, Wen
• Other Names: Jin Zhen Academic Editor.
• Is Part Of: Discrete dynamics in nature and society. Volume 2013(2013)
• Publication Date: 2013-12-08
• Subjects: System analysis -- Periodicals; Dynamics -- Periodicals; Chaotic behavior in systems -- Periodicals; Differentiable dynamical systems -- Periodicals; 003.05
• DOI: 10.1155/2013/275134
• Languages: English
• ISSNs: 1026-0226

Abstract

Abstract : We propose a new nonlinear economic system with fractional derivative. According to the Jumarie's definition of fractional derivative, we obtain a discrete fractional nonlinear economic system. Three variables, the gross domestic production, inflation, and unemployment rate, are considered by this nonlinear system. Based on the concrete macroeconomic data of USA, the coefficients of this nonlinear system are estimated by the method of least squares. The application of discrete fractional economic model with linear and nonlinear structure is shown to illustrate the efficiency of modeling the macroeconomic data with discrete fractional dynamical system. The empirical study suggests that the nonlinear discrete fractional dynamical system can describe the actual economic data accurately and predict the future behavior more reasonably than the linear dynamic system. The method proposed in this paper can be applied to investigate other macroeconomic variables of more states.