Asset price dynamics in a financial market with fundamentalists and chartists (Q5953153)

This paper studies a deterministic model for the dynamics of asset prices in a financial market with interaction between fundamentalists and chartists. The model is described by a two-dimensional map which has regions of invertibility and non-invertibility in the space of its parameters. While the local stability behaviour is well understood, the paper focuses on a global analysis by means of numerical simulations and studies in particular how the qualitative structure of the basins of attraction changes near a bifurcation. Tools used are critical curves associated to noninvertible maps, homoclinic bifurcations and homoclinic orbits of saddles in regions of invertibility.