Switching Regimes in Economics: The Contraction Mapping and the ω-Limit Set

Pascal Stiefenhofer, Peter Giesl

    Research output: Contribution to journalArticlepeer-review


    This paper considers a dynamical system defined by a set of ordinary auto- nomous differential equations with discontinuous right-hand side. Such sys- tems typically appear in economic modelling where there are two or more re- gimes with a switching between them. Switching between regimes may be a consequence of market forces or deliberately forced in form of policy imple- mentation. Stiefenhofer and Giesl [1] introduce such a model. The purpose of this paper is to show that a metric function defined between two adjacent tra- jectories contracts in forward time leading to exponentially asymptotically stability of (non)smooth periodic orbits. Hence, we define a local contraction function and distribute it over the smooth and nonsmooth parts of the peri- odic orbits. The paper shows exponentially asymptotical stability of a periodic orbit using a contraction property of the distance function between two adja- cent nonsmooth trajectories over the entire periodic orbit. Moreover it is shown that the ω-limit set of the (non)smooth periodic orbit for two adjacent initial conditions is the same.
    Original languageEnglish
    Pages (from-to)513-520
    JournalApplied Mathematics
    Publication statusPublished - 3 Jul 2019

    Bibliographical note

    Copyright © 2019 by author(s) and
    Scientific Research Publishing Inc.
    This work is licensed under the Creative
    Commons Attribution International
    License (CC BY 4.0).


    • Non-Smooth Periodic Orbit
    • Differential Equation
    • Contraction Mapping
    • Economic Regimes
    • Non-Smooth Dynamical System


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