Periodic, Quasi-Periodic and Phase-Locked Oscillations and Stability in the Fiscal Dynamical Model with Tax Collection and Decision-Making Delays

Abstract

In this paper, we consider the complex dynamics of a fiscal dynamical model, which was improved from Wolfstetter classical growth cycle model by Sportelli et al. The main work of the present paper is to study the impact of fiscal policy delays on the national income adjustment processes using a dynamical method, such as double Hopf bifurcation analysis. We first use DDE-BIFTOOL to find the double Hopf bifurcation points of the system, and draw the bifurcation diagrams with two bifurcation parameters, i.e. the tax collection delay [Formula: see text] and the public expenditure decision-making delay [Formula: see text]. Then we employ the method of multiple scales to obtain two amplitude equations. By analyzing these amplitude equations, we derive the classification and unfolding of these double Hopf bifurcation points. And three types of double Hopf bifurcations are found. Finally, we verify the results by numerical simulations. We find complex dynamic behaviors of the system via the analytical method, such as stable equilibrium, stable periodic, quasi-periodic and phase-locked solutions in respective regions. The dynamical phenomena can help policy makers to choose a proper range of the delays so that they could effectively formulate fiscal policies to stabilize the economy.