On the existence of chaotic policy functions in dynamic optimization

Applying the characterization results from Mitra and Sorger (1999), we show that topological chaos is a robust phenomenon in standard aggregative grow th models even under arbitrary mild discounting. Furthermore, we slate exac t discount factor restrictions, under which two of the most popular example s of chaotic dynamics, the logistic map and the tent map, can be optimal po licy functions of aggregative growth models. JEL Classification Numbers: C6 1, O41.