MODE-LOCKING AND ENTRAINMENT OF ENDOGENOUS ECONOMIC CYCLES

We explore the robustness of aggregation in Sterman's model of the eco nomic long wave. The original model aggregates all capital-producing f irms into a single sector and generates a large-amplitude self-sustain ed oscillation with a period of roughly 50 years. We disaggregate the model into two coupled industries, one representing production of plan t and long-lived infrastructure and the ment and machinery. While hold ing the aggregate equilibrium characteristics of the model constant, w e investigate how mode-locking occurs as a function of the difference in capital lifetimes and the strength of the coupling between the sect ors. Disaggregation allows new modes of behavior to arise: In addition to mode-locking, we observe cascades of period-doubling bifurcations, chaos, intermittency, and quasi-periodic behavior. Despite the introd uction of these additional modes, the basic behavior of the model is r obust to the aggregation assumption. We consider the likely effects of finer disaggregation, the introduction of additional coupling mechani sms, such as prices, and other avenues for the exploration of aggregat ion in system dynamics models.