Exploring Chaos Theory in Economic Growth and Energy Price Dynamics: A Numerical Simulation Approach

Abstract

Chaos theory offers a unique lens to understand the intricate relationships between economic growth and energy supply pricing. Existing economic theories often emphasize energy prices' inherent randomness, unpredictability, and economic growth. A deeper comprehension can be achieved by applying chaos theory to this complex system. Developing a dynamic model that captures the causal relationships among the various variables impacting economic growth, energy supply, and pricing is crucial for unraveling this complexity. This study aims to delve into the chaotic nature of the energy economy system within the context of economic growth. The research methodology is rooted in a fundamental-applied approach. By employing numerical simulation techniques, specifically utilizing the Simulink MATLAB toolbox, the study seeks to explore and potentially control chaos within the system. The findings highlight the system's nonlinear dynamics, showcasing its sensitivity to initial conditions and exhibiting chaotic behavior, limit cycles, and stable equilibrium points across varying initial values. This research endeavor contributes to a more nuanced understanding of the interplay between energy economics, economic growth, and pricing dynamics.

Keywords

• chaos theory
• energy economy
• economic growth
• numerical simulation