Modeling Economic Cycles: Exploring the Dynamics of Global GDP Growth Rates

Abstract

In this paper, we delve into the cyclical nature of the global economy, aiming to develop a model that effectively captures the fluctuations in GDP growth rates, often leading to economic crises. We focus on testing the bifurcation model, renowned for its ability to elucidate the emergence of economic cycles, using real-world data on GDP growth rates. Our investigation revolves around examining the dynamics of the model's bifurcation parameters over short time intervals, seeking to ascertain its efficacy in characterizing the behavior of the world economy. The test results yield promising outcomes, affirming that the proposed model adeptly describes the intricate dynamics of global economic fluctuations. Through our analysis, we identify qualitative characteristics of the model, which include stability areas, stable fixed points, stable cycles, and dynamic stability areas. These findings not only contribute to our understanding of the underlying mechanisms driving economic cycles but also provide valuable insights for policymakers and economists striving to navigate the complexities of the global economic landscape. Ultimately, our study underscores the significance of robust modeling frameworks in comprehending and potentially mitigating the impacts of economic crises on a global scale. The comparison with statistical data revealed a compelling alignment between GDP trends for global economic growth and the stability areas identified within the bifurcation model. This convergence underscores the significance of investigating the qualitative characteristics of the bifurcation model as a means of accurately describing and understanding global economic processes. These findings not only highlight the relevance of the bifurcation model in capturing the complexities of economic dynamics but also open new avenues for further research. In our subsequent studies, we aim to delve deeper into the qualitative features of the bifurcation model, with a particular focus on exploring the stability areas of approximating polynomials of the 3rd degree, which effectively characterize the evolving dynamics of the world's GDP. By conducting these additional investigations, we anticipate uncovering novel insights and potentially developing new analytical tools for comprehensively analyzing the intricate dynamics of the global economic system. This line of research holds promise for advancing our understanding of economic phenomena and informing more effective strategies for managing and navigating the complexities of the global economy.