A Financial Oscillator Model

7. Financial Investment Implications and Conclusion

Since the financial sector is volatile, a financial oscillator model is necessary to study the non-linear complex dynamic behavior of the sector. Incorporation of a damping function to stabilize the oscillatory dynamics of the financial sector can facilitate an understanding of the control mechanism useful for smooth functioning of the financial market. The modeling and computational experiments in this chapter show similar results as those obtained in Chapter 2. Switching times and costs of switching control are significant factors in the determination of optimal investment planning strategy for the economy. Higher costs of switching control reduce the optimal number of switching times essential in evolving an optimal investment strategy overtime. The dampening factor is also significant in designing stable optimal investment planning.