Advances in Management and Applied Economics

The Chaotic Inflation Growth Model: The Euro Area

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• Abstract

  The basic aim of this analysis is to set up a relatively simple chaotic inflation growth model that is capable of generating stable equilibria, cycles, or chaos. It is important to analyze the local stability of inflation growth in the Euro Area in the period 2000-2013 (www.imf.org). A key hypothesis of this work is based on the idea that the coefficient μ = ( 1 – ρ ) plays a crucial role in explaining local stability of inflation, where, ρ – the coefficient which explaines relation between unemployment rate growth rate and the fraction of the labor force that is not used up by the unemployment .This paper confirms continously fluctuations of inflation in the eurozone in the period 2000-2013.