Abstract
The cusp catastrophe model provides a useful tool for the analysis of several interesting phenomena (e.g.,hysteresis, divergence, abrupt changes), which are usually assumed away in economic modelling. This paper surveys the applications of the cusp in economics and derives estimates for the parameters of the equilibrium and the disequilibrium model based an the method of moments and the maximum likelihood method. Moreover, we present a hypothesis test that enables us to compare the cusp (nonlinear) model with a traditional (linear) model by means of statistical data.
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An earlier version of this paper was presented at theX. Symposium on Operations Research (Munich 1985) and at the Annual Meeting of the Austrian Society of Operations Research (Vienna 1985). We are indebted to Loren Cobb for generously providing his cusp analysis program.
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Jammernegg, W., Fischer, E.O. Economic applications and statistical analysis of the cusp catastrophe model. Zeitschrift für Operations Research 30, B45–B58 (1986). https://doi.org/10.1007/BF01919499
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DOI: https://doi.org/10.1007/BF01919499