Nonlinearities in Economics: An Interdisciplinary Approach To Economic Dynamics, Growth and Cycles 1st Edition Giuseppe Orlando (Editor)

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Dynamic Modeling and Econometrics in
Economics and Finance 29
Giuseppe Orlando
Alexander N. Pisarchik
Ruedi Stoop Editors
Nonlinearities
in Economics
An Interdisciplinary Approach
to Economic Dynamics, Growth and
Cycles
Dynamic Modeling and Econometrics
in Economics and Finance
Volume 29
Series Editors
Stefan Mittnik, Department of Statistics, Ludwig Maximilian University of Munich,
München, Germany
Willi Semmler, New School for Social Research, New York, NY, USA and Bielefeld
University, Germany
In recent years there has been a rapidly growing interest in the study of dynamic
nonlinear phenomena in economic and financial theory, while at the same time
econometricians and statisticians have been developing methods for modeling such
phenomena. Despite the common focus of theorists and econometricians, both lines
of research have had their own publication outlets. The new book series is designed
to further the understanding of dynamic phenomena in economics and finance
by bridging the gap between dynamic theory and empirics and to provide cross-
fertilization between the two strands. The series will place particular focus on
monographs, surveys, edited volumes, conference proceedings and handbooks on:
• Nonlinear dynamic phenomena in economics and finance, including equilibrium,
disequilibrium, optimizing and adaptive evolutionary points of view; nonlin-
ear and complex dynamics in microeconomics, finance, macroeconomics and
applied fields of economics.
• Econometric and statistical methods for analysis of nonlinear processes in
economics and finance, including computational methods, numerical tools and
software to study nonlinear dependence, asymmetries, persistence of fluctua-
tions, multiple equilibria, chaotic and bifurcation phenomena.
• Applications linking theory and empirical analysis in areas such as macrody-
namics, microdynamics, asset pricing, financial analysis and portfolio analysis,
international economics, resource dynamics and environment, industrial orga-
nization and dynamics of technical change, labor economics, demographics,
population dynamics, and game theory.
The target audience of this series includes researchers at universities and research
and policy institutions, students at graduate institutions, and practitioners in eco-
nomics, finance and international economics in private or government institutions.
More information about this series at http://www.springer.com/series/5859

Giuseppe Orlando • Alexander N. Pisarchik •
Ruedi Stoop
Editors
Nonlinearities in Economics
An Interdisciplinary Approach to Economic
Dynamics, Growth and Cycles
Editors
Giuseppe Orlando Alexander N. Pisarchik
Department of Economics & Finance Technical University of Madrid
University of Bari Aldo Moro Center for Biomedical Technology, Campus
Bari, Italy Montegancedo
Pozuelo de Alarcón, Madrid, Spain
Ruedi Stoop
Institute of Neuroinformatics
Swiss Federal Institute of Technology
Zürich, Switzerland
ISSN 1566-0419 ISSN 2363-8370 (electronic)

Dynamic Modeling and Econometrics in Economics and Finance
ISBN 978-3-030-70981-5 ISBN 978-3-030-70982-2 (eBook)
https://doi.org/10.1007/978-3-030-70982-2
© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland
AG 2021
This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether
the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse
of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and
transmission or information storage and retrieval, electronic adaptation, computer software, or by similar
or dissimilar methodology now known or hereafter developed.
The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication
does not imply, even in the absence of a specific statement, that such names are exempt from the relevant
protective laws and regulations and therefore free for general use.
The publisher, the authors, and the editors are safe to assume that the advice and information in this book
are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or
the editors give a warranty, expressed or implied, with respect to the material contained herein or for any
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claims in published maps and institutional affiliations.
This Springer imprint is published by the registered company Springer Nature Switzerland AG.
The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland
Reviews
Finally, a volume is coming out in our Springer Series Dynamic Modeling and
Econometrics in Economics and Finance that will be of great service to the
community of nonlinear modelers in economics—with very comprehensive surveys
on history, theory, and econometrics of complex systems.
Arnhold Professor of International Cooperation and Development at The New
School for Social Research
New York, NY, USA Willi Semmler

May 2021
Handling nonlinear dynamic phenomena has always been a difficult challenge in

economics. The contributions in this volume present new perspectives and views—
also from disciplines outside of economics—helping to tackle these challenges. The
volume thus provides valuable impulses for advancing economic theory as well as
empirical research.
Chair of Financial Econometrics - LMU Munich
Munich, Germany Stefan Mittnik

May 2021
This highly-valuable book is a great entry-point for understanding the economy
as a self-organizing non-linear dynamical system. This book not only introduces the
reader to advanced techniques but also applies them to modern economic growth
and business cycle models.
Princeton, New Jersey, USA Markus Brunnermeier

May 2021
v
Preface
Dear Reader,
Rather unanticipated, this book became a demonstration of how fruitful scientific

meetings can be if held among open-minded participants. During a recent Non-
linear Dynamics of Electronic Systems (NDES) conference, an inquisitive-minded
economist from Bari (Giuseppe Orlando, G.O.) sparked the idea that economics
should be treated along the guidelines that we use for the analysis of systems
composed of strongly nonlinear subsystems, such as magnets, neurons, and more.
Pretty much all of the people agreed that it was a pity that a book leading students of
economics or similarly interested readers into such a direction seemed to be missing.
Usually, things end after having arrived at such an agreement, in particular if you are
not an economist. However, never-tired, incredibly patient, and gentle insistence by
G.O. pushed a bunch of us into preparing for such a journey with him. This book is
the result of the journey, where we have been strongly supported by former teachers
and academic friends of G.O. Together, we hope that the collected volume will prove
helpful in leading a young generation of scholars to new pathways of understanding
economics. Specifically, the text aims at providing a bridge between nonlinear
dynamics (with chaotic behaviour lurking in the background) towards opening new
horizons of insight into economics, by the tools and concepts provided. Therefore,
the book starts with a mathematical introduction into nonlinear dynamics, followed
by a layout of signal analysis tools and their application to some well-known
abstract models of economics generating chaotic response, before we present new
insights into how we see economic dynamics. Finally, we present economics models
that emerge in this perspective and demonstrate that real-world data supports their
validity and usefulness. Since students are the strongest motivation and a main
privilege of our profession, I take this opportunity to dedicate my part in this book
to my late student and friend Clemens Wagner. Had not his heart suddenly stopped
beating before we started writing this book, my contribution would have been
with him. I would also like to strongly thank Celso Grebogi for his never-fading
generous and unselfish support for everything that advances Nonlinear Science.
vii
viii Preface
Without him, many exciting developments and events (not least the mentioned
NDES conferences) would not have been achieved.
We hope that you will find the text inspiring and useful. Let even the parts that
you might like less sharpen your view and become beneficial to you in this way as
well.
Bari, Italy Giuseppe Orlando

Pozuelo de Alarcón, Madrid, Spain Alexander N. Pisarchik
Zürich, Switzerland Ruedi Stoop
May 2021
Acknowledgments
This book was a long trip with great companions that strengthened both academic
and human ties between authors and co-editors. To some extent, this was at the
expense of our families, and of friends not engaged in this endeavour.
Giuseppe Orlando, in particular, would like to ask the indulgence of his children
Niccolò Libero and Gaia Carmela Francesca who have many good reasons to
complain about their father during this period. He would also like to express his
sincere gratitude and appreciation to Carlo Lucheroni at the University of Camerino
for numerous helpful comments, to Nicola Basile at the University of Bari for
valuable suggestions provided, to Luigi Fortuna and his colleagues at the University
of Catania for having organized the NDES2019—Nonlinear Dynamics of Electronic
Systems Conference and to Edward Bace at the Middlesex University for his help in
polishing some of the chapters. Sincere special thanks go to Michele Mininni at the
University of Bari who has been a firm point of reference from G.O.’s early study
days on. Last but not least, he expresses his profound obligation to his parents, as
without support and love by the parents, not much can be accomplished during one’s
lifetime.
ix
Contents
1 Introduction .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 1
Giuseppe Orlando, Alexander N. Pisarchik, and Ruedi Stoop
Part I Mathematical Background

2 Dynamical Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 13
Giuseppe Orlando and Giovanni Taglialatela
3 An Example of Nonlinear Dynamical System: The Logistic Map. . . . . 39
4 Bifurcations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 51
Giuseppe Orlando, Ruedi Stoop, and Giovanni Taglialatela
5 From Local Bifurcations to Global Dynamics: Hopf Systems
from the Applied Perspective .. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 73
Hiroyuki Yoshida
6 Chaos. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 87
7 Embedding Dimension and Mutual Information . . .. . . . . . . . . . . . . . . . . . . . 105
Part II Signal Analysis and Modelling Tools for Economic

Systems
8 Signal Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 111
Ruedi Stoop
9 Applied Spectral Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 123
Fabio Della Rossa, Julio Guerrero, Giuseppe Orlando,
and Giovanni Taglialatela
xi
xii Contents
10 Recurrence Quantification Analysis: Theory and Applications .. . . . . . 141

Giuseppe Orlando, Giovanna Zimatore, and Alessandro Giuliani
Part III Emergence of Cycles and Growth in Economics

11 On Business Cycles and Growth . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 153
Giuseppe Orlando and Mario Sportelli
12 Trade-Cycle Oscillations: The Kaldor Model
and the Keynesian Hansen–Samuelson Principle
of Acceleration and Multiplier . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 169
Giuseppe Orlando
13 The Harrod Model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 177
Giuseppe Orlando, Mario Sportelli, and Fabio Della Rossa
14 Growth and Cycles as a Struggle: Lotka–Volterra, Goodwin
and Phillips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 191
Giuseppe Orlando and Mario Sportelli
15 Stable Periodic Economic Cycles from Controlling.. . . . . . . . . . . . . . . . . . . . 209
Ruedi Stoop
Part IV New Horizons for Understanding Economics

16 Kaldor–Kalecki New Model on Business Cycles . . . .. . . . . . . . . . . . . . . . . . . . 247
Giuseppe Orlando
17 Recurrence Quantification Analysis of Business Cycles .. . . . . . . . . . . . . . . 269
Giuseppe Orlando and Giovanna Zimatore
18 An Empirical Test of Harrod’s Model . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 283
Giuseppe Orlando and Fabio Della Rossa
19 Testing a Goodwin’s Model with Capacity Utilization
to the US Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 295
Ricardo Azevedo Araujo and Helmar Nunes Moreira
20 Financial Stress, Regime Switching and Macrodynamics.. . . . . . . . . . . . . 315
Pu Chen and Willi Semmler
Appendix A .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 337
Back Cover . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 361
Contributors
Ricardo Azevedo Araujo University of Brasilia, Department of Economics,

Brasília (DF), Brazil
Pu Chen Melbourne Institute of Technology, Melbourne, Australia
Alessandro Giuliani Environment and Health, Istituto Superiore di Sanità (ISS),
Rome, Italy
Julio Guerrero University of Jaén, Department of Mathematics, Jaén, Spain
Helmar Nunes Moreira University of Brasilia, Department of Mathematics,
Brasília, Brazil
Giuseppe Orlando University of Bari, Department of Economics and Finance,
Bari, Italy
University of Camerino, School of Sciences and Technology, Camerino, Italy
Alexander N. Pisarchik Technical University of Madrid, Center for Biomedical
Technology, Campus Montegancedo, Pozuelo de Alarcón, Madrid, Spain
Fabio della Rossa University of Naples “Federico II”, Department of Electrical
Engineering and Information Technology, Naples, Italy
Department of Electronics Information and Bioengineering, Politecnico di Milano,
Milan, Italy
Willi Semmler New School for Social Research, Department of Economics,
New York, USA
University of Bielefeld, Department of Economics, Universitätsstraße 25, Bielefeld,
Germany
Mario Sportelli University of Bari, Department of Mathematics, Bari, Italy
Ruedi (Rudolf) Stoop ETHZ and University of Zurich, Institute of Neuroinfor-
matics, Zürich, Switzerland
Emeritus and Regent’s Professor, University of Xi’an, Xi’an, P.R. China
xiii
xiv Contributors
Giovanni Taglialatela Department of Economics and Finance, Bari, Italy

Hiroyuki Yoshida College of Economics, Nihon University, Tokyo, Japan
Giovanna Zimatore eCampus University, Department of Theoretical and Applied
Sciences, Rome, Italy
Chapter 1
Introduction
Giuseppe Orlando, Alexander N. Pisarchik, and Ruedi Stoop
Philosophy is written in this grand book, the universe, which

stands continually open to our gaze. But the book cannot be
understood unless one first learns to comprehend the language
and read the letters in which it is composed. It is written in the
language of mathematics, and its characters are triangles,
circles, and other geometric figures without which it is humanly
impossible to understand a single word of it; without these, one
wanders about in a dark labyrinth.
Galileo Galilei
The Assayer
1.1 Nonlinearity and Unpredictability in Economics
Until the twentieth century, many mathematical economists, such as Francis

Edgeworth, William Jevons, Alfred Marshall, Leon Walras, and Vilfredo Pareto,
developed economic models based on principles of Newtonian mechanics by focus-
ing exclusively on static states or equilibrium points. Later, their ideas culminated
G. Orlando ()
University of Bari, Department of Economics and Finance, Bari, Italy
e-mail: [email protected]; [email protected]
A. N. Pisarchik
Technical University of Madrid, Center for Biomedical Technology, Campus Montegancedo,
Pozuelo de Alarcón, Madrid, Spain
e-mail: [email protected]
R. Stoop
ETHZ and University of Zurich, Institute of Neuroinformatics, Zurich, Switzerland
Technical University of Xi’an, Xi’an, Shaanxi, China
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 1

G. Orlando et al. (eds.), Non-Linearities in Economics, Dynamic Modeling
and Econometrics in Economics and Finance 29,
https://doi.org/10.1007/978-3-030-70982-2_1
2 G. Orlando et al.
in a general equilibrium theory (see, for example, Debreu [6], Arrow and Hann [1],
etc.). Only at the beginning of the twentieth century, to describe market dynamics
in economic models of business cycles, economists did start using difference and
differential equations. Ragnar Frisch [10], for example, suggested to study the
evolution of economics in time from a dynamical systems viewpoint. The future
state of such a system depends only on its past and present. Such a slush in economic
theory is largely due to outstanding discoveries of mathematicians in the field of
nonlinear dynamics made at the end of the nineteenth century. The most prominent
achievements were the development of stability theory by Aleksandr Lyapunov and
the solution of three-body problem by Henri Poincaré [32].
Three centuries later, Birkhoff showed that Poincaré’s geometric intuition can
be cast within a mathematically precise description. This could have been the early
official birthday of chaos theory, if aspects of irregular, unpredictable dynamics were
recognised as relevant for real-world experimental systems as well. If appropriately
perceived, Van der Pol, who presented almost simultaneously with Birkhoff his
electronic heart pacemaker circuit (showing, in addition to period “heartbeats” also
chaotic behaviour), would have provided this experimental connection.
Originally, the term “chaos” was generally used for dynamical processes that
lacked aspects of order that would render their dynamics easily seizable in the
sense of predictability. As a consequence, the main understanding was, for a long
time, that we would never be able to arrive at a thorough understanding of such
phenomena. A chaotic system has specific properties that differ from a stochastic or
noisy system. First of all, a chaotic motion is deterministic (in the sense that every
event is physically determined by an unbroken chain of earlier events) and crucially
depends on initial conditions.
The reason why this more precise notion of chaos took so long to penetrate
into the standard science was twofold. First, apart from the mentioned more global
approaches, the preferred mathematical analysis methods were linearisation around
fixed points of the motion, from which the asymptotic dynamics were extracted.
This local approach, however, is sufficient only for linear systems. Nonlinearity
provides fixed-objects that are not present in linear systems, such as limit cycles,
that are not captured by linearization methods.
Edward Norton Lorenz was among the first to discover in the 1960s a so-called
strange attractor in a three-dimensional continuous-time dynamical system, when
carrying out numerical experiments on convection flows [15]. Indeed, the advent of
direct numerical simulations of differential equations on computers made it finally
possible to access and to explore the chaos phenomenology, to anyone for whom
computational power was available. Initially, Lorenz was able to publish his work
in marginal journals only. Until well into the late 1970s, several physics scholars
in the western world, in particular, Mitchell Feigenbaum [2, 7] established the
breakthrough of the new view on dynamics. He drew the attention of the scientific
society to the ubiquitousness of this phenomenon, and offered new pathways of
how to characterise and to predict such phenomena. It would, however, be unfair to
withhold the great contributions to this area by scientists of the former Soviet Union,
such as Andrey Kolmogorov, Vladimir Arnold, Aleksandr Andronov, Oleksandr
1 Introduction 3
Sharkovsky, and others. In fact, Feigenbaum’s findings aroused interest and finally
got accepted only after a presentation of Feigenbaum given to Soviet scientists.
Through the research conducted by many scholars not following the scientific
mainstream, and their collaborative efforts, it was finally shown that, seen on a
higher level, chaotic dynamics is not only ordered [9] and therefore intelligible but
also that it is deterministic and controllable [30, 33, 34].
It took some time to work out the fundamentals of chaotic dynamics and
then, the analysis proceeded towards the description and the exploitation of chaos
for applications. A field that seems particularly attractive and suitable for this is
economics that, from its statistical description, can be expected to be organised
along the fundamental principles of symmetry breaking and self-organisation as
well, and manifests a behaviour that could, with an appropriate permitting analysis,
be associated with chaotic processes. Economic dynamics is obviously nonlinear. In
particular, it is characterised by cyclical fluctuations called “business cycles”. Burns
and Mitchell [4] define business cycles as a type of fluctuation which “consists of
expansions occurring at about the same time in many economic activities, followed
by similarly general recessions, contractions, and revivals which merge into the
expansion phase of the next cycle” (where a recession is a negative variation of
the economy for two consecutive quarters cf. Fig. 1.1).
Fig. 1.1 Changes in US real disposable personal income (i.e., the personal income net of income
taxes) (blue—DSPIC96) and Real personal consumption expenditures (red—PCECC96) 1959
(Q1)—2014 (Q2). Source: Federal Reserve Economic Data (FRED), St. Louis Fed. Greyed vertical
areas correspond to periods of economic recessions (i.e., economic contraction) as reckoned by
FRED (Table A.1)
4 G. Orlando et al.
The emergence of these very robust cycles is one strong motivation for our pro-
posed change of paradigm. In contrast to the stochastic models focusing exclusively
on external and random shocks (like the so-called real business cycle (RBC)), we
propose to—alternatively or synergetically—consider structural system character-
istics that are endogenous (in contrast to the exogenous influences considered in
the traditional approaches). In that regard, by comparing an Ornstein–Uhlenbeck
stochastic process [22, 23] with a Kaldor–Kalecki [17, 18] deterministic chaotic
model, Orlando et al. [28] exhibited that nonlinearity in the latter model permits to
represent reality at least as well as the stochastic model. Furthermore, the Kaldor–
Kalecki model was able to reproduce an extreme event (black swan [28, 35]). A
further confirmation can be found in Orlando et al. [29], where it was shown that real
and simulated business cycle dynamics have similar characteristics, thus validating
the chaotic model as a suitable tool to simulate reality. Notwithstanding economic
dynamics is not purely deterministic, a strong stochastic component always exists
and should be included in economic models. Therefore, statistical analysis of
economic data is important to reveal the presence of determinism in the behaviour
and to forecast future evolution. However, the effect of random fluctuations is
unpredictable although probabilistic analysis in financial modelling can provide
us with some information about possible scenarios. For example, increasing noise
could indicate an impending financial crisis, because the dynamical systems are
known [8, 14] to amplify random fluctuations when approaching a critical point.
Another promising application of nonlinear analysis methods to economy would
be the possibility to predict sudden jumps or drops in stock prices that occur
for no apparent reason. By considering these jumps as extreme events, the same
approach as for forecasting sudden weather changes [3], giant laser pulses [31], or
forthcoming epileptic seizures [11] could be used. Such a research (not included in
this book) is still under development.
1.2 Scheme of This Book
The whole endeavour taken by this work embraces (i) finding suitable models of
business cycles, (ii) searching for indicators for structural changes in economic
signals, and (iii) comparing time series generated by the studied models versus
real-world time series [27–29]. Our book consists of four parts. Focusing on
a particularly attractive class of economic nonlinear models related to growth
and business cycles, we explore chaotic behaviour of these models by means
of numerical analysis, recurrence quantification, and statistical techniques, and
demonstrate that the results are consistent with those obtained by applying the
same techniques to time series of real-world macroeconomic data. This implies
that with the help of these methods we are able to (i) identify common features
between data and model whenever they exist, (ii) to discover features that guide
economic dynamics, and (iii) to extract indicators of structural changes in the
signal (e.g., precursors of crashes and more general catastrophes). We emphasise the
1 Introduction 5
importance of nonlinear analysis and outline methodological prospects of dynamical

approaches which can help to solve fundamental economic problems such as “Is
the economy growing?”, “How efficiently are the resources being utilised?”, “Is
economy stochastic or deterministic?”, and “Is it possible to predict changes in
economy?” These problems cannot be solved by traditional methods of stochastic
and linear analyses.
Part I is formal-methodological, providing the mathematical background for the
remainder. In the aforementioned part we introduce the reader to the complex
system theory and provide the theoretical basis for the rest of the book. This part
is divided into Chaps. 2–7. Chapter 2 starts with basic definitions widely accepted
in Nonlinear Dynamics, such as types of dynamical systems and attractors, and we
derive Schwarz and Sarkovsky theorems that are fundamental theorems in chaos
theory.
Then, using the generic example of the Logistic map, in Chap. 3 we demonstrate
how the route to chaos proceeds if nonlinearity is increased via a cascade of period-
doubling bifurcations when a control parameter is increased. Finally, we describe
the main properties of chaos, using measures like information on the corresponding
attractors. In Chap. 4 we provide the definition of homoclinic and heteroclinic orbits
and we provide a summary on local bifurcations for both the continuous case and the
discrete-time case. In Chap. 5, we pay a special tribute to the Hopf bifurcation from
the applicative point of view. In fact, the Hopf theorem was one of the most powerful
tools to prove the existence of closed orbits for systems of ordinary differential
equations. Using two popular dynamical system models, i.e., the Lorenz and Rössler
ones, we describe different types of bifurcations and chaotic attractors. Then, we
discuss Shilnikov’s chaos through homoclinic orbits and emphasise the importance
of the concept of delay-differential equations in economics. Special attention is
given to delay-differential equations due to the fact that changes in economy are
not immediate. Finally, brief comments on some applications of economic models
are added at the end of each section. Chapter 6 first explains the concept of an
embedding dimension. Then we discuss the deeper meaning of the term “chaos”
and highlight its relation to the sensitive dependence on initial condition, stretching
and folding of the phase-space. Statistical measurement characterising these features
such as the Lyapunov exponents and measures of attractors are introduced. Finally,
the last Chap. 7 is dedicated to the embedding dimension and the mutual information
which are relevant for dealing with measured time series and experimental data.
Part II is divided into Chaps. 8–10. Chapter 8 presents a specific view of signal
processing. After providing some basic definitions of signal processing, we explain
the topic in more detail by a selection of relevant algorithms and approaches.
In a nutshell, the idea is that signal processing is a process of computation, that
computation describes the process of information destruction, and that the efficacy
of this process can be measured. Chapter 9 explains what a signal in economy looks
like and what physical properties it has, such as frequency, spectral energy, phase,
power, etc. Furthermore, some examples are provided on how to analyse a signal.
Chapter 10 is devoted to the so-called recurrence quantification analysis (RQA). We
describe mathematical basis and requirements for the recurrent plot analysis. We
6 G. Orlando et al.
explain how this method can be applied to detect spatio-temporal recurrent patterns
underlying different dynamical regimes in economic time series. Such analysis
allows us to reveal the nature of business cycles and corresponding macroeconomic
variables, i.e., whether their character is deterministic or stochastic. Furthermore we
show how RQA provides an indicator of structural changes in chaotic time series
[25, 26].
As a book on economic dynamics, Part III focuses more on economics itself,
providing more specifically economics-related background and literature. While
in economics the phenomenon of chaos may be expected to contribute many
fascinating aspects, to go beyond purely intellectual constructions with limited
real-world explanatory strength, we provide the reader the background information
regarding theories on growth and business cycles. In particular, Chap. 11 focuses on
the ties between real-world economics and nonlinear dynamics. Chapter 12 provides
a sketch of the Keynesian multiplier and of the multiplier-accelerator model by
Hansen and Samuelson, and of the Kaldor model. Chapter 13 explains Domar’s
and the Harrod’s model separately. In contrast to standard economic literature that
glues those models together, in our view Harrod instability (tested in Chap. 18)
has nothing to do with the mathematical notion of the instability characterising the
Domar model. Chapter 14 is about the interpretation of cycles as a struggle between
capitalists and workers. This is introduced by the Phillips curve (which statistically
relates unemployment with the rate of change of nominal wages), followed by the
Lotka–Volterra model which is the basic framework of the Goodwin model. The
latter reinterprets, in economic terms, the dynamics of prey-predator of biological
systems. Chapter 15 explains how control over a system that becomes unstable
or highly noisy can be achieved. The objective is to calm down and optimise the
system’s behaviour. We show that such measures lead to stable cycles in any generic
nonlinear system and that hard-limiter control follows a nongeneric dynamical
system behaviour with a bifurcation cascade to chaos that is fundamentally distinct
from the Feigenbaum case.
Part IV consists of Chaps. 16–20 that are devoted to new perspectives in under-
standing economics. A reality check on the theories discussed in earlier parts by the
means described in Parts I–III is provided. Chapter 16 introduces the experimental
Part of the book, following Goodwin’s opinion that nonlinearities are the origin of
oscillations in economics [12]. We use this approach to study cycles with Kaldor’s
framework, as is detailed in Chap. 12. The model presented is an alternative to the
usual models available in literature [17, 18]. Additional features, such as a full set
of parameters and the ability to embed randomness, open the way to a mixture of
stochastic and deterministic chaos. Chapter 17 describes an indicator that exhibits
structural changes in a signal/time series related to chaos [25]. To achieve that, RQA
and statistical techniques are applied, to both real time series and model-generated
time series [26]. Our aim is to (i) find common properties if and where they do exist,
(ii) discover some hidden features of economic dynamics and (iii) highlight some
1 Introduction 7
indicators of structural changes in the signal (i.e., in our case to look for precursors
of a crash). In Chap. 18 we focus on the Harrod’s model detailed in Chap. 13.
We present a specification of Harrod’s model where chaos is a consequence of
the gaps between actual, warranted and natural rates of growth. For this model,
we prove that real-world economic dynamics can be replicated by a suitable
calibration of the parameters of the model. Moreover, we prove that opening the
economy to foreign trade can lead to reducing cyclical instability, thus confirming
Harrod’s conjecture [19]. Chapter 19 presents an extension of the Goodwin growth-
cycle model that considers the rate of capacity utilisation as a new variable in an
adapted Lotka–Volterra system of differential equations, where capacity utilisation
is proportional to the difference between the output expansion function and capital
accumulation. With this approach, connections between demand, labour market, and
capital accumulation are established in a model that generates a cyclical pattern
amongst the employment rate, the profit share, and capacity utilisation. The model
is then tested against the US economy, using quarterly data from 1970 to 2019
and the Vector Auto-Regression (VAR). The latter is a stochastic process model
widely used in econometrics to capture the linear interdependencies between time
series. The conclusion is that positive profit share innovation affects positively both
the employment rate and the rate of capacity utilisation, suggesting a profit-led
pattern supporting the theoretical model presented (especially to the profit-squeeze
mechanism).
Lastly, Chap. 20 summarises advances in nonlinear model predictive control
(NMPC) through multi-regime cointegrated VAR (MRCIVAR). The study exhibits
the impact of financial stress shocks and monetary policy at macroeconomic level
in different countries. The chapter illustrates the vector error correction model
(VECM), that is commonly used to model macroeconomic time series, because
VECM is able to connect the economic theory around equilibrium and the dynamic
process towards the equilibrium into a set of empirically testable relations. The said
feature has been exploited to study business cycles during different phases by many
(e.g., see Mittnik and Semmler [16], Chen et al. [5] and Hamilton [13]). MRCIVAR
is used to examine the impact of real activities on the financial stress. The outcome
is that financial shocks have asymmetric effects on the short term interest rate,
depending on the regime the economy is in. More precisely, in the rate-cut regime
a financial stress shock will decrease the short term rate while, in the non-rate-cut
regime, the shock will increase the short term rate (even though in some cases the
effects are not statistically significant).
We hope that, with this book we provide some food for thought to a wide
audience and stimulate curiosity in approaching economics unconventionally by
hybridisation with physics, engineering, and economics. We have left out our
research on financial mathematics [20, 21, 23, 24] intentionally, as this matter runs
parallel to the presented material as long as market stability, solvency, and resilience
of financial institutions are concerned.
8 G. Orlando et al.
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Allen & Unwin, Crows Nest (1933)
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83, 502–522 (2013)
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model on business cycle. Math. Comput. Simul. 125, 83–98 (2016). https://doi.org/10.1016/
j.matcom.2016.01.001
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Dynamical Systems with Self-Excited and Hidden Attractors (2018). https://doi.org/10.1007/
978-3-319-71243-7_6
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pp. 35–43. Springer, Berlin (2018). https://doi.org/10.1007/978-3-319-95285-7_2
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SEF-03-2019-0116
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1002/for.2642
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Financ. (2019). https://doi.org/10.1108/JRF-05-2019-0080
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Math. 320, 202–220 (2017). https://doi.org/10.1016/j.cam.2017.02.002
1 Introduction 9
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1142/9789811201523_0012
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(2007)
Part I
Mathematical Background
Chapter 2
Dynamical Systems
2.1 Dynamical Systems and Their Classification
The concept of dynamical system that we will use here is taken from R.E. Kalman
[1] who introduced it in the 1960s while studying the problem of linear filtering and
prediction.
Roughly speaking, a system consists of a set of the so-called states (generally
vectors of real numbers), where the adjective dynamics emphasizes the fact that
these states vary in time according to a suitable dynamical law. This concept
of dynamical system is cast in the following definition.
Definition 2.1 (Dynamical System) A dynamical system is an entity defined by
the following axioms:
1. There exist an ordered set T of times, a set X of states and a function φ from T ×
T × X to X. φ is called a state transition function.
2. For all t, τ ∈ T and for all x ∈ X one has that φ(t, τ, x) represents the state at
time t of a system whose initial state at time τ is x.
3. The function φ satisfies the following properties:
Consistency: φ(τ, τ, x) = x for all τ ∈ T , and for all x ∈ X.
G. Orlando ()
G. Taglialatela
e-mail: [email protected]
© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 13

G. Orlando et al. (eds.), Non-Linearities in Economics, Dynamic Modeling
and Econometrics in Economics and Finance 29,
https://doi.org/10.1007/978-3-030-70982-2_2
14 G. Orlando and G. Taglialatela

Composition: φ(t3 , t1 , x) = φ t3 , t2 , φ(t2 , t1 , x) , for all x ∈ X and for all
t1 , t2 , t3 ∈ T with t1 < t2 < t3 .
In the following we always consider X = Rn .
Definition 2.2 (Reversibility) If the state transition function φ defined for any
(t, τ ) in T × T , once assigned the initial time τ and the initial state x, the state
of the system is uniquely determined for the future (i.e. for all t > τ ), as well as for
the past (i.e. for t < τ ), the system is said to be reversible.
If the state transition function φ is defined only for t ≥ τ , then the system is said
to be irreversible.
Definition 2.3 (Event, Orbit and Flow) For all t ∈ T , x ∈ X, the pair (t, x) is
called an event. Moreover, for τ and x fixed, the function t ∈ T → φ(t, τ, x) ∈ X
is called a movement of the system. The set of all movements is called a flow. The
image of the movement, i.e. the set

φ(t, τ, x) t ∈ T ,
is called an orbit (or a trajectory) of the system, i.e. the orbit passing through the
state x at time τ .
It is not always possible to find a closed formula for the orbits of dynamical
systems, but it is possible to study the behaviour of the orbits for long time
nonetheless.
Definition 2.4 (Fixed or Equilibrium Point) A state x ∗ ∈ X is called a fixed point
(or an equilibrium point) of the dynamics, if there exist t1 , t2 ∈ T , with t2 > t1 , such
that
φ(t, t1 , x ∗ ) = x ∗ , for all t ∈ T ∩ [t1 , t2 ] .
x ∗ is said to be a fixed point in an infinite time if there exists t1 > T such that
φ(t, t1 , x ∗ ) = x ∗ for all t ∈ T ∩ [t1 , +∞[ .
Definition 2.5 (Eventually Fixed Orbit) An orbit is said to be eventually fixed if

it contains a fixed point.
Definition 2.6 (Eventually Fixed Point) A point is called eventually fixed if its
orbit is eventually fixed.
Definition 2.7 (Stability) The fixed point x ∗ is stable if for every ε > 0 there
exist δ > 0 and t0 ∈ T such that for all x ∈ X with |x − x ∗ | ≤ δ,

φ(t, τ, x) − x ∗ ≤ ε holds for any t > t0 .
2 Dynamical Systems 15
The fixed point x ∗ is asymptotically stable if it is stable and there exists a δ > 0
such that for all x ∈ X with |x − x ∗ | ≤ δ it holds that

lim φ(t, τ, x) − x ∗ = 0 holds.
t →∞
The fixed point x ∗ is globally asymptotically stable if it is stable and

lim φ(t, τ, x) − x ∗ = 0 , for any τ ∈ T and x ∈ X .
t →∞
Definition 2.8 (Autonomous System) The system is called autonomous if
φ(t, τ, x) =
φ (t − τ, x) (2.1)
for some suitable function

φ.
That is, an autonomous system does not explicitly depend on the independent
variable. If the variable is time (t), the system is called time-invariant. For example,
the classical harmonic oscillator yields to an autonomous system. A nonautonomous
system of n ordinary first order differential equations can be changed into an
autonomous system, by enlarging its dimension using a trivial component, often
of the form xn+1 = t.
Definition 2.9 (Discrete and Continuous System) The system is called
discrete, if the time set T is a subset of the set of the integers Z =
{. . . , −3, −2, −1, 0, 1, 2, 3, . . . }.
The system is called continuous if T is an interval of real numbers.
In Sect. 2.2.1 we consider continuous-time dynamical systems, and in Sect. 2.5
we consider discrete-time dynamical systems.
2.2 Continuous-Time Dynamical
2.2.1 Continuous-Time Dynamical Systems from Ordinary

Differential Equations
Let I = [a, b] ⊂ R and let f : I × R → R.

We recall the following version of the Cauchy–Lipschitz Theorem (see Bonsante
and Da Prato[3]).
Theorem 2.1 (Cauchy–Lipschitz) Assume that there exists L > 0 such that

f (t, x1 ) − f (t, x2 ) ≤ L|x1 − x2 | , (2.2)
for any t ∈ I and x1 , x2 ∈ R. Then for any τ ∈ I , ξ ∈ R the Cauchy problem

ẋ(t) = f t, x(t) ,t ∈ I ,
(2.3)
x(τ ) = ξ
has a unique solution in [a, b].

From Theorem 2.1 it follows that the ordinary differential equation
ẋ = f (t, x) (2.4)
defines a continuous reversible dynamic system. In fact the time set is T = I , the
state set is X = R and the state transition function φ is the function from I × I × R
to R such that for all t, τ ∈ I , ξ ∈ R one has that
φ(t, τ, ξ ) = x(t) ,
where x(t) is the unique solution of the Cauchy problem (2.3). In this case the
movements are the solutions to Eq. (2.4) and, for any solution x, the corresponding
orbit is on the interval x(t) t ∈ I .
The system is autonomous if, and only if, the function f does not depend
explicitly on t, that is we have

ẋ(t) = f x(t)
(i.e. in the case of a differential equation of the form ẋ = f (x), with f : R → R

derivable function with continuous and bounded derivative), since in this case one
has
φ(t, τ, x) = φ(t − τ, 0, x) for all t, τ, x ∈ R. (2.5)
An equilibrium point is a solution of the differential equation ẋ = f (x), which

is constant on the interval J = [t1 , t2 ] ⊂ I . Hence, the equilibrium points of the
system are the solutions x ∗ ∈ R of the equation f (x) = 0.
2.2.2 Continuous-Time Dynamical Systems from Systems of

Ordinary Differential Equations
The discussion contained in the previous Sect. 2.2.1 for a single equation can be
extended to systems of ordinary differential equations.
In fact, if x = (x1 , x2 , . . . , xn ) ∈ Rn , let f = f (t, x) be a vector function
from I × Rn to Rn , and let f1 , f2 , . . . , fn be the components of f .
Assume that f1 , f2 , . . . , fn are continuous functions in I × Rn , that the partial

derivatives of f1 , f2 , . . . , fn with respect to all variables x1 , x2 , . . . , xn exist and are
continuous in I × Rn , and that these partial derivatives are bounded in [a, b] × Rn
for all [a, b] ⊂ I .
Then, for all t0 ∈ I and x 0 ∈ Rn the Cauchy problem

ẋ(t) = f t, x(t) , t ∈ I ,
(2.6)
x(t0 ) = x 0
has one and only one solution on the interval I .

Therefore, the system of ordinary differential equations

ẋ(t) = f t, x(t)
defines a reversible continuous dynamical system.

The time set is T = I , the state set is X = Rn and the state transition function
is the mapping φ from I × I × Rn to Rn such that for all t, τ ∈ I , x ∈ Rn one has
that φ(t, τ, x) is the value in t of the unique solution of the Cauchy problem (2.6).
In this case, the movements are solutions of the system (2.6) and, for any solution
x(t) of such a system of differential equations, the corresponding orbit is a curve in
Rn of the parametric equation x = x(t), t ∈ I .
As before, the system is autonomous if f is independent of t, i.e. in the case of a
system of differential equations of the form ẋ = f (x). In this case, an equilibrium
point is a solution of the system of differential equations ẋ = f (x) that is constant
on an interval J ⊂ I . Thus, the equilibrium points of the system are the solutions
x ∗ ∈ Rn of the system of equations f (x ∗ ) = 0.
Remark 2.1 A nonautonomous system of n ordinary first order differential equa-
tions can be changed into an autonomous system, by enlarging its dimension using
a trivial component, often of the form xn+1 = t.
Remark 2.2 The notion of dynamical system, as outlined in Definition 2.1,
describes the case in which the evolution of the system depends only on internal
causes.
However, there are situations where the evolution of the system can be modified
through the action of external forces, i.e. by means of a time-dependent input vector
function u. In this case Definition 2.1 can be generalized in the sense that a dynamic
system is characterized by a time set T , a state set X, an input set U with a set Ω
of admissible input functions from T to U and a state transition function φ from T ×
T × X × Ω to X such that for all t, τ ∈ T , x ∈ X, u ∈ Ω, φ(t, τ, x, u) represents
the state of the system at time t, if the state is x at time τ with an input function u
acting on the system.
Obviously, the state of the system at time t will only depend on the initial time τ ,
the initial state x and the restriction of the input function u to the interval of extremes
t and τ . Hence, we have to assume that the state transition function φ satisfies the
following properties.
Consistency: φ(τ, τ, x, u) = x(t) ∀ (τ, x, u(·)) ∈ T × X × Ω.
Composition: φ(t3 , t1 , x, u) = φ (t3 , t2 , φ (t2 , t1 , x, u) , u) for each (x, u) ∈ X ×
Ω, and for each t1 < t2 < t3 .
Causality: If u, v ∈ Ω and u|[τ,t ] = v|[τ,t ] , then φ(t, τ, x, u) = φ(t, τ, x, v).
This framework can be used for theoretical approaches in continuous-time
systems.
2.3 Stability of Continuous-Time Systems
We recall some known facts about the exponential of square matrix.

Definition 2.10 (Exponential of Square Matrix) Given a square matrix A,
the exponential of A is defined by
+∞
1 j 1 1 1
exp(A) = A = I + A + A2 + A3 + · · · + Aj + · · · .
j! 2 6 j!
j =0
The basic properties of the exponential are listed below:

• If 0 is the null matrix, then exp(0) = I .
• If A and B commute, that is AB = BA, then exp(A) exp(B) = exp(A + B).
In particular exp(αA) exp(βA) = exp (α + β)A , for any α, β ∈ R.
• For any square matrix A, exp(A) is invertible; moreover
−1
exp(A) = exp(−A) .
• exp(A T ) = exp(A)T .

• det exp(A) = etr(A) , where tr(A) denotes the trace of A.
• If B = P AP −1 , where P is an invertible matrix, then
exp(B) = P exp(A) P −1 .
• If A is diagonal
⎛ ⎞
λ1 0 ... 0
⎜ 0 λ2 0 ⎟
⎜ ⎟
A=⎜. . . ⎟,
⎝.. . . .⎠
.
0 ... 0 λn
then
⎛ ⎞
e λ1 0 ... 0
⎜ 0 e λ2 0 ⎟
⎜ ⎟
exp(A) = ⎜ . .. . ⎟.
⎝ .. . .. ⎠
0 ... 0 e λn
When we deal with a linear system of differential equations expressed in matrix

form as
ẋ = Ax ,
A being a fixed matrix, the solution for the initial point x 0 at t = 0 is given by
x(t) = exp(tA) x 0 .
Indeed, as
+∞ j
t
x(t) = Aj x 0
j!
j =0
we have
+∞ +∞ j
t j −1 t
ẋ(t) = Aj x 0 = Aj +1 x 0
(j − 1)! j!
j =1 j =0
+∞ j
t
=A Aj x 0 = A x(t) .
j!
j =0
We can obtain the behaviour of the solution x(t) by studying the eigenvalues
of the matrix A. Indeed, assume for example that A is diagonalizable and all the
eigenvalues λj , j = 1, . . . , n, have negative real part. We then have
⎛ λ1 t ⎞
e 0 ... 0
⎜ 0 e λ2 t 0 ⎟
⎜ ⎟ −1
x(t) = exp(tA) x 0 = P ⎜ . . . ⎟ P x0 ,
⎝ .. .. .. ⎠
0 ... 0 e λn t
for some invertible matrix P . As eλn t → 0 for t → +∞, we see that the solution
x(t) = 0 is stable.
The Hartman–Grobman Theorem 2.2 given below will elucidate the behaviour
around the fixed points of nonlinear systems by a linearization in a neighbourhood
of the equilibrium. To this end, we need to introduce the following definitions

(Zimmerman [11]).
Definition 2.11 (Homeomorphism) A function h : X → Y is a homeomorphism
between X and Y if it is continuous and bijective (one-to-one and onto function)
with a continuous inverse denoted by h−1 .
Remark 2.3 A homeomorphism means that X and Y have similar structure and that
h (resp., h−1 ) may stretch and bend the space but does not tear it.
Definition 2.12 (Diffeomorphism) A function f : U ⊆ Rn → V ⊆ Rn is called
diffeomorphism of class C k if it is surjective (onto) and injective (one-to-one), and
if the components of f and its inverse have continuous partial derivatives up to the
k-th order with respect to all variables.
Definition 2.13 (Embedding) An embedding is a homeomorphism onto its image.
Definition 2.14 (Topological Conjugacy) Given two maps, f : X → X and
g : Y → Y , the map h : X → Y is a topological semi-conjugacy if it is continuous,
surjective and h ◦ f = g ◦ h, with ◦ function composition.
In addition, if h is a homeomorphism between X and Y , then we say that h is
a topological conjugacy and that X and Y are homomorphic.
Definition 2.15 (Hyperbolic Fixed Point) In the case of continuous-time dynam-
ical system,
ẋ = f (x),
a hyperbolic fixed point is a fixed point x ∗ for which all the eigenvalues of the
Jacobian matrix
⎛ ⎞
∂x1 f1 ∂x1 f2 . . . ∂x1 fn
⎜∂x f1 ∂x f2 . . . ∂x fn ⎟
⎜ 2 2 2 ⎟
Df = ⎜ . ⎟
⎝ .. ⎠
∂xn f1 ∂xn f2 . . . ∂xn fn
calculated in x ∗ have a non-zero real part.

Theorem 2.2 (Hartman–Grobman) Let f be C 1 on some E ⊂ Rn and let x ∗ be
a hyperbolic fixed point that without loss of generality we can assume x ∗ = 0.
Consider the nonlinear system ẋ = f (x) with flow φ(t, 0, x) and the linear system
ẋ = Ax, where A is the Jacobian Df (0). Let I0 ⊂ R, X ⊂ Rn and Y ⊂ Rn
such that X, Y and I0 each contain the origin. Then, there exists a homeomorphism
H : X → Y such that for all initial points x0 ∈ X and all t ∈ I0

H φ(t, 0, x0 ) = et A H (x0 )
holds. Thus, the flow of the nonlinear system is homeomorphic to et A (i.e. to the flow
of the linearized system).
A sufficient condition for an equilibrium x a to be stable is given by the following
theorem.
Theorem 2.3 (Lyapunov [8]) Let Ω be an open subset of Rn , and f : Ω → Rn be
a C 1 function. Let x a ∈ Ω be a zero of f .
Consider the dynamical system

ẋ(t) = f x(t) , x ∈ Rn .
The equilibrium x(t) = x a is stable if all the eigenvalues of the Jacobian matrix
of f at x a have a negative real part.
We end this section recalling a useful tool to prove the stability of equilibria.
Definition 2.16 (Lyapunov Function) Let f : Rn → Rn , with f (x 0 ) = 0, and
consider the autonomous dynamical system

ẋ(t) = f x(t) ,
so that x(t) ≡ x 0 is an equilibrium point.

A weak Lyapunov function (resp., a strong Lyapunov function) with respect to x 0
is a scalar C 1 function L defined in a neighbourhood U of x 0 such that:
• L(x 0 ) = 0 and L(x 0 ) > 0 for all x ∈ U \ {x 0 };
• ∇V (x) · f (x) > 0 (resp., ∇V (x) · f (x) ≥ 0) for all x ∈ U \ {x 0 }.
Theorem 2.4 If there exists a weak Lyapunov function (resp., a strong Lyapunov
function) with respect to the point x 0 , then x 0 is Lyapunov stable. (resp., asymptot-
ically stable).
2.4 Limit Cycles and Periodicity of Continuous-Time

Systems
In this section we consider a continuous-time dynamical system described by the

state transition function φ(t, τ, x). If differently specified, the following definitions
and results are taken from R. Devaney [5], H. W. Lorenz [7] and S. Sternberg [10]
Definition 2.17 (Limit Cycle) A limit cycle (see Fig. 2.1) is a closed orbit Γ for
which there exists a tubular neighbourhood U (Γ ) [9] such that for all x ∈ U (Γ )
one has
lim d(φ(t, τ, x), Γ ) = 0, (2.7)

t →+∞
Fig. 2.1 A limit cycle in the

three-dimensional phase
space
1
2
0 0
–1 –2
–3 –2
–1 0 1 2 –4
3
where we have
d(y, Γ ) = inf |y − z|. (2.8)

z∈Γ
In order to establish the existence of limit cycles, in the two-dimensional case,

we can refer to the following theorem by Poincaré and Bendixson.
Theorem 2.5 (Poincaré–Bendixson [7]) Let D be a non-empty, compact
(i.e. closed and bounded) set of the plane not containing fixed points of a C 1
vector field f from D to R2 and let γ ⊂ D be an orbit of the system ẋ = f (x).
Then, either γ is a closed orbit or γ asymptotically approaches a closed orbit
(i.e. there exists a limit cycle in D).
The limitations of Theorem 2.5 are related to finding a suitable set D and to the
fact that it is valid only in two dimensions. For example, we suppose that there exists
a compact set D ⊂ R3 with the vector field pointing inwards to D (see Fig. 2.2b)
and that there is a unique unstable equilibrium. Nevertheless, it is possible that no
closed orbit exists because a trajectory can arbitrarily wander in R3 without neither
intersecting itself nor approaching a limit set (see Fig. 2.3).
It is a simple consequence of the theorem of Poincaré and Bendixson together
with the uniqueness of the solutions of such systems that while two-dimensional
systems can produce limit cycles, for obtaining chaos, dimension three is required.
(a) (b)
Fig. 2.2 Convergence to the limit cycle. On the boundary of D, the vector field points inwards the
set. Therefore, once a trajectory enters in D, it will stay on it forever. (a) A system with a stable
limit cycle in a vector field. (b) Limit cycle in a compact set D [7]
2
−1
0
−2
0 −2
Fig. 2.3 In R3 Poincaré–Bendixson is invalid
The following result, in contrast to Theorem 2.5, provides a criterion to establish

the non-existence of closed orbits of a dynamical system in R2 :
Theorem 2.6 (Bendixson Negative Criterion [2]) Let

BR = (x, y) ∈ R2 x 2 + y 2 < R ,
with R > 0, and let f, g ∈ C 1 (BR ) be such that
∂x f (x, y) + ∂y g(x, y)
has constant sign and vanishes only at a finite number of points.

Then there exists no closed orbits in BR of the autonomous system

x = f (x, y)
y = g(x, y) .
Theorem 2.6 holds true in a more general setting: we can replace BR by a

generic simply connected subset of R2 , and assume that ∂x f (x, y) + ∂y g(x, y) has
constant sign except a set with zero measure.
In the one-dimensional systems, there are no periodic solutions. To put it another
way, trajectories increase or decrease monotonically, or remain constant. What is
more, the Poincaré–Bendixson theorem provides an important result in the two-
dimensional systems. It states that if a trajectory is confined to a closed and bounded
region that contains no equilibrium points, then the trajectory must eventually
approach a closed orbit. This result implies that chaotic attractors cannot happen
in nonlinear planar dynamical systems.
2.5 Discrete-Time Dynamical Systems
Definition 2.18 (Map) Let X be a subset of Rd , d ≥ 1, and let f : X → X be any

function. The recursive formula
xn+1 = f (xn ) (2.9)
defines a discrete dynamical system referred to as a d-dimensional map.

If we denote by the symbol f ◦n the n-th iterate of f , i.e. for n = 0 f ◦0 is the
identity on X and for n ≥ 1 the composition of f with itself n times, that is
⎧
⎪
⎪ if n = 0 ,
⎨x
◦n
f (x) = f (x) if n = 1 , (2.10)
⎪
⎩(f ◦ f ◦(n−1) )(x) = f f ◦(n−1) (x) if n > 1 ,
⎪
then the state transition function φ is defined by
φ(t, τ, x) = f ◦(t −τ ) (x) for all t, τ ∈ N, and t ≥ τ, (2.11)
since it is evident that φ satisfies the consistency and composition properties.

In this case, a movement is a sequence {xn }n∈N such that xn+1 = f (xn ) for all
n, whereas an orbit is a set of the form {x0 , x1 , x2 , . . . , xn , . . . } with xn+1 = f (xn )
for all n ∈ N.
In the following we focus on 1-dimensional dynamical systems.
Example 2.1 If d = 1, and f (x) = x 2 , the orbit of f with initial point x0 = 2 is
n
the set {2, 4, 16, 256, . . . } = {22 }n∈N .
Remark 2.4 Note that the dynamical system defined by Eq. (2.9) is autonomous
(cfr. Eq. (2.1)). Moreover it is reversible if and only if the function f is bijective.
Indeed, if f −1 is the inverse of f , we can extend the definition of f ◦n also
to negative n by
f ◦(−n) = (f −1 )◦n , for n ∈ N ;
hence, (2.11) holds true also for t < τ .

Example 2.2 If f (x) = x 2 , as f is not injective, the associated dynamical system
is not reversible: by knowing x1 = 1, one cannot deduce if the initial point is x0 = 1
or x0 = −1.
Definition 2.19 (Fixed or Equilibrium Point for a Discrete-Time System) A
fixed point (or a equilibrium point) x ∗ is a point of X such that f (x ∗ ) = x ∗ . In
this discrete-time case, the orbit departing from x ∗ is the singleton {x ∗ }.
Example 2.3 Let f (x) = x 2 .
The points 0 and 1 are the only fixed points for f . The point x = −1 is not fixed,
but it is an eventually fixed point for f because f (−1) = 1 = −1.
Definition 2.20 (Periodic orbit, cycle) The orbit of initial point x0 is said
to be periodic, or a cycle, if there exists p ∈ N such that f ◦p (x0 ) = x0 . In
this case, x0 is a periodic (or a cyclic) point.
The smallest number p such that f ◦p (x0 ) = x0 is called the period of x0 (or of
its orbit). To emphasize the period p, we say that x0 (or its orbit) is a p-periodic
point (or a p-periodic orbit).
Remark 2.5 A periodic orbit means that after a finite number of iterations we return
to the initial point and therefore the orbit has a finite number of elements.
Remark 2.6 (Period of an Orbit) A point x0 is periodic of period p if and only if
x0 is a fixed point of f ◦p . In particular, a fixed point x0 for f is fixed for all iterates
of f .
Often, fixed points are also called period-1 fixed points.
Example 2.4 If f (x) = −x, then x0 = 0 is the only fixed point of f and all other
points have period 2, the orbits being the sets of the form {x, −x}.
Definition 2.21 (Eventually Periodic Orbit) An orbit is said to be eventually

periodic if it contains a periodic point. Analogously, a point is called eventually
periodic if its orbit is eventually periodic.
Example 2.5 Consider the function f (x) = 1 − x 4 . The point x0 = −1 is an
eventually periodic point because f (−1) = 0 and 0 is contained in the cycle (0, 1).
Remark 2.7 (Recursive Methods for Finding Fixed Points) Recursive expressions
of the form of Eq. (2.9) are often used in numerical computations for solving equa-
tions. An example is given by the so-called Babylonian algorithm to approximate
the square root of a number a > 0

1 a
xn+1 = xn + . (2.12)
2 xn
A more general algorithm is the Newton method of approximating zero of a dif-

ferentiable function g as
g(xn )
xn+1 = xn − . (2.13)
g (xn )
For example, if g(x) = x 2 − a, g (x) = 2x, then the Newton algorithm in

Eq. (2.13) reduces to Eq. (2.12).
2.5.1 Cobweb Diagram
For a one-dimensional map f , the cobweb diagram (or Verhulst diagram) is

a method to graphically describe the orbit of an initial point x0 .
After drawing thegraph of f (x) and the bisector r of first and third quadrants,
draw the point P0 ≡ x0 , f (x0 ) .
Let x1 = f (x0 ), draw the horizontal line from P0 to the point on r with
coordinates (x1 , x1 ) and
draw the vertical line from this point to the graph of f
with coordinates P1 ≡ x1 , f (x1 ) .
For higher iterates we repeat the procedure. From x2 = f (x1 ), we draw the
horizontal line from P1 to the point on r with coordinates (x2 , x2 ) and
the vertical
line from this point to the graph f with coordinates P2 ≡ x2 , f (x2 ) (Fig. 2.4).
Fig. 2.4 The cobweb y

diagram
P1
P3
P5
P7
P6
P4
P2
x
x1 x3 x5 x7 x6 x4 x2
2.6 Attractors and Repellers
In this section, we provide some definitions concerning the behaviour of dynamical

systems that, unless differently specified, follow the conventions in R. Devaney [5],
H. W. Lorenz [7] and S. Sternberg [10].
Throughout the section f : R → R is a twice continuously differentiable
function, and f ◦n denotes its n-th iterate (cf. (2.10)).
Definition 2.22 (Critical Point) We say that xc ∈ R is a critical point of f if
f (xc ) = 0.
The critical point xc is degenerate if f (xc ) = 0 and non-degenerate if f (xc ) =
0.
Remark 2.8 Degenerate critical points may be maxima, minima or inflection points;
non-degenerate critical points, instead, must be either maxima or minima.
Example 2.6 Consider the functions fn (x) = x n , n ∈ N.
If n ≥ 2, then fn has a critical point in c = 0. In particular, if n = 2 the critical
point is non-degenerate, whereas if n > 2 the critical point is degenerate.
If n is even, the critical point is a minimum, whereas if n is odd the critical point
is an inflection point.
Remark 2.9 (Classification of Critical Points [4]) A critical point can be stable if
the orbit of the system is inside a bounded neighbourhood to the point for all times n
Fig. 2.5 Different examples of critical points. From top left clockwise: a centre denoting a stable
but not asymptotically stable point, an asymptotically stable node and an asymptotically stable
spiral both denoted as a sink. Then an unstable spiral and an unstable node, i.e. source. Last figure
shows a saddle node where some orbits converge and some others diverge
after some n∗ . A point is asymptotically stable if it is stable and the orbit approaches
the critical point as n → ∞. If a critical point is not stable, then it is unstable (see
Fig. 2.5). In some instances these critical points could have mixed characteristics
(see Fig. 2.6).
Definition 2.23 (Limit Set) Given x ∈ X, the limit set of x is the set A of points
ω ∈ X for which there is an increasing sequence of natural numbers {nj }j ∈N such
that
lim f ◦nj (x) = ω .

j →+∞
Definition 2.24 (Attractor) A compact (i.e. a closed and bounded) set A ⊂ X is

an attractor if there is an open set U containing A such that A is a limit set of all
points in U .
Definition 2.25 (Basin of Attraction) The set of all x having A as limit set is
called the basin of attraction of A.
Fig. 2.6 A critical point

combining a sink (I and II
quadrants) and saddle (III and
IV quadrants)
Remark 2.10 In particular, a singleton {xa } is an attractor if there exists δ > 0

such that for all x ∈]xa − δ, xa + δ[ the sequence f ◦n (x) n∈N has a subsequence
converging to xa .

Theorem 2.7 Let xa be a fixed point of f with f (xa ) < 1. Then a is
asymptotically stable and the set {xa } is an attractor.
More precisely there exists δ > 0 such that for all x ∈]xa −δ, xa +δ[ the sequence
(f ◦n (x))n tends to xa .

Proof Let K ∈ R be such that f (xa )| < K < 1, as
f (x) − f (a)
f (x) − xa
lim = lim = f (xa ) < K
x→xa |x − xa | x→xa x − xa
and since there exists δ > 0 such that for all x ∈]xa − δ, xa + δ[, one has
f (x) − f (a)

<K.
x − xa
Hence

f (x) − xa < K|x − xa | < Kδ . (2.14)
As K < 1 we deduce that if x0 ∈ ]xa − δ, xa + δ[, then x1 = f (x0 ) ∈

]xa − δ, xa + δ[.
Applying (2.14) to x = xn , we have

|xn+1 − xa < K|xn − xa | ,
as xn+1 = f (xn ). Thus it follows by induction that for all x0 ∈ ]xa − δ, xa + δ[ and
for all n ∈ N one has that

|xn − xa < K n |x0 − xa | < K n δ .
Hence, for all x0 ∈ ]xa − δ, xa + δ[ the distance of f ◦n (x0 ) from a decreases at

a geometric rate K < 1 and therefore tends to 0, as desired.
Remark 2.11 If one has f (0) = 0, then the preceding argument shows that the
distance of f ◦n (x) from a decreases at a geometric rate K for all K ∈ ]0, 1[.
The above remark justifies the following definition.
Definition 2.26 (Superattractor) A fixed point x ∗ such that f (x ∗ ) = 0 is called
a superattractor or superstable.

Remark 2.12 If f (xa ) > 1, then, for a fixed K ∈ R such that 1 < K < |f (xa )|,
there exists δ > 0 such that for all x ∈]xa − δ, xa + δ[ one has |f (x) − xa | >
K|x −xa |; hence the distance of f ◦n (x) from a increases at a geometric rate K > 1,
and therefore there exists n ∈ N such that |f ◦n (x) − xa | > δ.
This motivates the following definition.

Definition 2.27 (Repeller) A fixed point x ∗ with f (x ∗ ) > 1 is called unstable
or a repeller.
Example 2.7 Let us consider a function g twice continuously differentiable and the
Newton method of Eq. (2.13). In this case
g(x)
f (x) = x − , (2.15)
g (x)
and hence

g (x) g(x)g (x) g(x)g (x)
f (x) = 1 −
+
= . (2.16)
g (x) g (x) 2 g (x)2
If the point xa is a non-degenerate zero of g, then xa is a superattractive fixed point.

Remark 2.13 As already mentioned above, a periodic point xp of a period n is a
fixed point of f ◦n (n-fold composition of f ).
Moreover, if xp is periodic, the points
xp , f (xp ), f ◦2 (xp ), . . . , f ◦n−1 (xp ) (2.17)

are also periodic, and by the chain rule, the derivative of f ◦n in those points is the
same and equal to
(f ◦n ) (xp ) = f (xp ) f (f (xp )) · · · f (f ◦n−1 (xp )). (2.18)
Definition 2.28 (Hyperbolic Bifurcation Point) Let xp be a periodic point

of prime period n (see Remark 2.6), and the point xp is called hyperbolic if
|(f ◦n ) (xp )| = 1. (2.19)
The number (f ◦n ) (xp ) is called a hyperbolic point multiplier.

Definition 2.29 (Bifurcation Point) A non-hyperbolic fixed point is called a bifur-
cation point.
Definition 2.30 (Attractive Periodic Orbit) If xp is an attractive (resp., a repeller)
fixed point for f ◦n , then so are all others, and it is called an attractive periodic orbit.
Definition 2.31 (Superattractive Periodic Orbit) A periodic point is super-
attractive for f ◦n if and only if f (s) = 0 at least for one of the points
xp , f (xp ), f ◦2 (xp ), . . . , f ◦n−1 (xp ).
Example 2.8 As was mentioned above, an attractor as well as a repeller can be a
fixed or a periodic point. For example, the function f (x) = −x 3 has two cyclic
points −1 and +1 of period 2 and a fixed one x0 = 0 (see Fig. 2.7a).
It can easily be verified that x0 is an attractor for the basin (−1, +1) and that the
cyclic orbit −1, +1 is a repeller. To show that it is sufficient to study the function
y y
P0
P2
P4 P3 P1 P2
x x
x0 x2 x4 x3 x1 x0 x1 x2
P1
P0
(a) (b)
Fig. 2.7 Convergence to the attractor. Panel (a) represents f (x) = −x 3 that is a mirror image
of f (x) = x 3 and panel (b) corresponds to the graph of f ◦2 (x) = x 9
f ◦2 (x) for which −1 and +1 are fixed repeller points, and since neither is fixed for
f , then they will be cyclic repellers (see Fig. 2.7b).
We end this section with the n-dimensional version of Theorem 2.7.
Theorem 2.8 Consider the discrete-time dynamical system
x n+1 = f (x n ) ,
where f : Rn → Rn is a smooth map. Let x a be a fixed point of f , that is
f (x a ) = x a ,
and assume that the eigenvalues of the Jacobian matrix of f

⎛ ⎞
∂x1 f1 ∂x1 f2 . . . ∂x1 fn
⎜∂x f1 ∂x f2 . . . ∂x fn ⎟
⎜ 2 2 2 ⎟
Df = ⎜ . ⎟
⎝ .. ⎠
∂xn f1 ∂xn f2 . . . ∂xn fn

calculated at x a lie inside the unit circle z ∈ C z < 1 .
Then x a is an attractor.
2.7 Existence of Periodic Behaviour
In this section we present some definitions that will be used in Sect. 3.1.
2.7.1 Schwarz Derivative
Definition 2.32 (Schwarz Derivative) Let f be a one-dimensional map defined in

the real field, three times derivable. The Schwarz derivative of f is defined by
2
d f (x) 1 f (x)
f (x) =
S
− , (2.20)
dx f (x) 2 f (x)
or, equivalently, by
2
f (x) 3 f (x)
f (x) =
S
− . (2.21)
f (x) 2 f (x)
The relevant property of the Schwarz derivative is to preserve the sign with the
composition, in the sense that if f S (x) > 0, then it is also (f ◦n )S (x) > 0 ∀n ∈
N. To prove this statement we first prove a “chain rule” formula for the Schwarz
derivative.
Lemma 2.1 Let f, g be three times derivable, and then
2
(f ◦ g)S (x) = f S g(x) g (x) + g S (x) . (2.22)
Proof According to the (ordinary) chain rule, we have

(f ◦ g) (x) = f g(x) g (x)
2
(f ◦ g) (x) = f g(x) g (x) + f g(x) g (x)
3
(f ◦ g) (x) = f g(x) g (x) + 3f g(x) g (x)g (x) + f g(x) g (x) .
Hence,
3
f g(x) g (x) + 3f g(x) g (x)g (x) + f g(x) g (x)
(f ◦ g)S (x) =
f g(x) g (x)
2 2
3 f g(x) g (x) + f g(x) g (x)
−
2 f (x)
⎡ 2 ⎤
f g(x) 3 f g(x) 2
= ⎣ −

⎦ g (x)
f g(x) 2 f g(x)

g (x) 3 g (x) 2
+ −
g (x) 2 g (x)
2
= f S g(x) g (x) + g S (x) .
By (2.22), if f S < 0 and g S < 0, then (f ◦ g)S < 0. In particular, if f S

is negative, then (f ◦n )S is also negative for all n > 1. This yields the following
theorem (for illustration see Ref. [5]).
Theorem 2.9 (Schwarz Theorem) If f S < 0 and if f has n critical points, then
f has at most n + 2 attracting periodic orbits.
From (2.21) we see that if Q is a polynomial of degree at most 2, then QS < 0.
For higher degree polynomials, we have the following proposition.
Proposition 2.1 Let Q(x) be a polynomial whose first derivative Q (x) has real
roots. Then QS (x) < 0.
Proof Suppose that

n
Q (x) = (x − ai ) with ai real . (2.23)
i=1
Then
n !n n
− ai )
i=1 (x Q (x)
Q (x) = = . (2.24)
x − aj x − aj
j =1 j =1
Therefore, by (2.20),
⎛ ⎞ ⎛ ⎞2
n n
d 1 1 1
QS (x) = ⎝ ⎠− ⎝ ⎠
dx x − aj 2 x − aj
j =1 j =1
⎛ ⎞2
n n
1 1⎝ 1 ⎠
=− − < 0.
(x − aj )2 2 x − aj
j =1 j =1
2.7.2 Singer’s Theorem
As mentioned before , the Schwarz derivative preserves the sign under composition
that is useful in the following theorem.
Theorem 2.10 (Singer [7]) Let f be a map from a closed interval I ⊆ [0, b] onto
itself; then the dynamical system xn+1 = f (xn ) has at most one periodic orbit in
the interval I if the following conditions are met:
1. f is a function C 3 ;
2. There exists a critical point xc ∈ I such that
⎧
⎪
⎪
⎨f (x) > 0 , for x < xc ,
f (x) = 0 , for x = xc ,
⎪
⎪
⎩f (x) < 0 , for x > x .
c
3. The origin is a repeller for f , that is

f (0) = 0, and f (0) > 1;
4. The Schwarz derivative is
f S (x) ≤ 0 for all x ∈ I \ {xc }.

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short stories must, even at the best, know himself denied the
dramatist’s crowning advantage—which is the thrill of actual human
presence.
I have not presumed, except incidentally and by way of
illustration, to sit in rapid judgment, and award impertinently blame or
praise to the most or the least prominent of those who are writing
short stories to-day. Even an occasional grappler with the difficulties
of a task is not generally its best critic. He will criticise from the
inside, now and then, and so, although you ought to have from him,
now and again, at least—what I know, nevertheless, that I may not
have given—illuminating commentary—you cannot have final
judgment. Of the art of Painting, where skill of hand and sense of
colour count for much more than intellect, this is especially true. It is
true, more or less, of Music—in spite of exceptions as notable as
Schumann and Berlioz: almost perfect critics of the very art that they
produced. It is true—though in a less degree—of creative Literature.
We leave this point, to write down, before stopping, one word about
tendencies.
Among the better writers, one tendency of the day is to devote a
greater care to the art of expression—to an unbroken continuity of
excellent style. The short story, much more than the long one, makes
this thing possible to men who may not claim to be geniuses, but
who, if we are to respect them at all, must claim to be artists. And
yet, in face of the indifference of so much of our public here to
anything we can call Style—in face, actually, of a strange
insensibility to it—the attempt, wherever made, is a courageous one.
This insensibility—how does it come about?
It comes about, in honest truth, partly because that instrument of
Art, our English tongue, in which the verse of Gray was written, and
the prose of Landor and Sterne, is likewise the necessary vehicle in
which, every morning of our lives, we ask for something at breakfast.
If we all of us had to demand breakfast by making a rude drawing of
a coffee-pot, we should understand, before long—the quickness of
the French intelligence on that matter being unfortunately denied us
—the man in the street would understand that Writing, as much as
Painting, is an art to be acquired, and an art in whose technical
processes one is bound to take pleasure. And, perhaps, another
reason is the immense diffusion nowadays of superficial education;
so that the election of a book to the honours of quick popularity is
decided by those, precisely, whose minds are least trained for the
exercise of that suffrage. What is elected is too often the work which
presents at a first reading everything that it presents at all. I
remember Mr. Browning once saying, àpropos of such a matter,
‘What has a cow to do with nutmegs?’ He explained, it was a
German proverb. Is it? Or is it German only in the way of ‘Sonnets
from the Portuguese’? Anyhow, things being as they are, all the
more honour to those younger people who, in the face of
indifference, remember that their instrument of English language is a
quite unequalled instrument of Art.
Against this happy tendency, one has to set—in regard at least
to some of them—tendencies less admirable. For, whilst the only
kind of work that has a chance of engaging the attention of Sainte-
Beuve’s ‘severe To-morrow’ is work that is original, individual,
sincere, is it not a pity, because of another’s sudden success, to be
unremittingly occupied with the exploitation of one particular world—
to paint for ever, say, in violent and garish hue, or in deep shades
through which no light can struggle, the life of the gutter? to paint it,
too, with that distorted ‘realism’ which witnesses upon the part of its
practitioners to one thing only, a profound conviction of the ugly! I
talk, of course, not of the short stories of the penetrating observer,
but of those of the dyspeptic pessimist, whose pessimism, where it is
not the pose of the contortionist—adopted with an eye to a
sensational success of journalism, to a commercial effect—is
hysteria, an imitative malady, a malady of the mind. The profession
of the literary pessimist is already overcrowded; and if I name two
writers who, though in different degrees, have avoided the
temptation to join it—if I name one who knows familiarly the cheery
as well as the more sombre side of Cockney character and life, Mr.
Henry Nevinson, the author of the remarkable short-stories,
Neighbours of Ours, and then again a more accepted student of a
sordid existence—Mr. George Gissing, in Human Odds and Ends
especially—I name them but as such instances as I am privileged to
know, of observant and unbiassed treatment of the subjects with
which they have elected to deal.
In France, in the short story, we may easily notice, the uglier
forms of ‘Realism’ are wearing themselves out. ‘Le soleil de France,’
said Gluck to Marie Antoinette, ‘le soleil de France donne du génie.’
And the genius that it gives cannot long be hopeless and sombre. It
leaves the obscure wood and tangled bypath; it makes for the open
road: ‘la route claire et droite’—the phrase belongs to M. Leygues
—‘la route claire et droite où marche le génie français.’ Straight and
clear was the road followed—nay, sometimes actually cut—by the
unresting talent of Guy de Maupassant, the writer of a hundred short
stories, which, for the world of his day at least, went far beyond
Charles Nodier’s earlier delicacy and Champfleury’s wit. But,
somehow, upon De Maupassant’s nature and temperament the
curse of pessimism lay. To deviate into cheeriness he must deal with
the virtues of the déclassées—undoubtedly an interesting theme—
he must deal with them as in the famous Maison Tellier, an ebullition
of scarcely cynical comedy, fuller much of real humanity than De
Goncourt’s sordid document, La Fille Elisa. But that was an
exception. De Maupassant was pessimist generally, because,
master of an amazing talent, he refreshed himself never in any
rarefied air. The vista of the Spirit was denied him. His reputation he
may keep; but his school—the school in which a few even of our own
imitative writers prattle the accents of a hopeless materialism—his
school, I fancy, will be crowded no more. For, with an observation
keen and judicial, M. René Bazin treats to-day themes, we need not
say more ‘legitimate’—since much may be legitimate—but at least
more acceptable. And then again, with a style of which De
Maupassant, direct as was his own, must have envied even the
clarity and the subtler charm, a master draughtsman of ecclesiastic
and bookworm, of the neglected genius of the provincial town (some
poor devil of a small professor), and of the soldier, and the
shopkeeper, and the Sous-Préfet’s wife—I hope I am describing M.
Anatole France—looks out on the contemporary world with a vision
humane and genial, sane and wide. Pessimism, it seems to me, can
only be excusable in those who are still bowed down by the
immense responsibility of youth. It was a great poet, who, writing of
one of his peers—a man of mature life—declared of him, not ‘he
mopes picturesquely,’ but ‘he knows the world, firm, quiet, and gay.’
To such a writer—only to such a writer—is possible a happy comedy;
and possible, besides, a true and an august vision of profounder
things! And that is the spirit to which the Short Story, at its best, will
certainly return.
(Nineteenth Century, March 1898.)

MY RARE BOOK
I wish I could say it was my diligence that discovered it, and that I
hunted it out of some fifth-rate bookstall of Goswell Street or of the
New Road—‘all this lot at 6d. apiece.’ But no, it has no romantic
story as far as I am concerned. Given perhaps, eighty years ago, by
friend to friend, or lover to sweetheart, in days when our great-
grandmothers were beautiful and our great-grandfathers devoted, it
got to be neglected, it got to be sold—somebody ceased to care for
it, or somebody wanted the few shillings it then would bring—
somehow it tossed about the world, till a keen bookseller or keen
bookbuyer rescued it, and took it to a binder of note, and then it was
arrayed in seemly dress, and safer for the future. Afterwards—but
not for very long, I think—it was a rich man’s possession: one thing,
and quite a little thing, in a great library of English classics, from
Defoe and Sterne to Dickens and Tennyson. Then it came to be sold,
along with most or all of its important companions, and so I got it, in
prosaic fashion. I bought it under the hammer at Sotheby’s—or
rather, Mr. F. S. Ellis bought it there on my behalf—on the 3rd of
March, in this present year of grace. And now it takes up its position
on insignificant shelves, by the side of the Rogers with the Turner
illustrations; by the side of a few things—but the collector knows
them not.
This is how it figures in the auctioneer’s catalogue: ‘Wordsworth
(W.) Lyrical Ballads, with a few other Poems (including Rime of the
Ancyent Marinere by Coleridge), First Edition, green morocco
extra g. e. by Riviere, 1798.’ The ‘g. e.’ means nothing more
mysterious than ‘gilt edges.’ The morocco is of a rich and sunny
green—the ‘good’ green of modern artistic speech, which rightly
enough, I suppose, endows colour and line with moral qualities. I am
thankful to the rich man for having saved me both money and
trouble, in binding, completely to my taste, it happens, my rare book.
And few things, perhaps, deserve more careful guardianship.
The Lyrical Ballads, as the world now knows, were a starting-point in
the new English Literature, which addressed itself to study in the
field of Nature more than in academies, and which taught us the
beauty and interest of common life and of everyday incident; and it is
a delight to me to see the pages of these simple lyrics and pastorals
as Wordsworth’s own eye was content with them when Cottle, the
Bristol bookseller, passed them through the press, and printed them,
as well as might be, on pleasantly toned paper, bearing here and
there on its water-mark the date of its making, ‘1795.’ On the whole,
it is a well-printed book; two hundred and ten pages, tastefully
arranged, and of errata there are but five. Those were days when
centralisation had not brought the best work all to London, and even
concentrated it in certain quarters of London; and of what is
sometimes called provincial, but of what there is better reason to
define as suburban, clumsiness—for nothing is done so ill in the
world as what is done in London suburbs—there is only a trace in
the gross inequality of the size of the figures in the table of contents:
they are taken, it appears, from different founts. But generally the
book is printed with smoothness and precision, and, even apart from
the high literature which it enshrines, is worthy of its good green
coat, joyful of hue, pleasant of smell, and grateful of touch to the
fingers that pass over it. And nothing that comes now, even from the
Chiswick Press, or from Jouaust or whoever may be the fashionable
printing man to-day in Paris, can be much neater than its title-page;
the mention of which brings me to a point of interest to the
bibliophile.
The book has two title-pages; or, rather, like many of the books
of its day, there belong two title-pages to the same edition of it—the
custom having been for a second bookseller, who bought what the
first bookseller was minded to get rid of, to print his own title-page.
This is the course that the thing followed in the matter of Lyrical
Ballads. The book was printed, as we shall see in detail presently, by
Cottle, in Bristol, in the year 1798. Five hundred copies were printed,
but they did not sell. ‘As a curious literary fact,’ says Cottle, in his
‘Recollections,’ ‘I might mention that the sale of the First Edition of
the Lyrical Ballads was so slow, and the severity of most of the
reviews so great, that its progress to oblivion seemed ordained to be
as rapid as it was certain.’ ‘I had given,’ he adds, ‘thirty guineas for
the copyright; but the heavy sale induced me to part with the largest
proportion of the impression of 500, at a loss, to Mr. Arch, a London
bookseller.’ Mr. Arch printed his own title-page. My copy has his title-
page, ‘London, printed for J. & A. Arch, Gracechurch Street’; and so,
I think, had the copy sold at Mr. Dew Smith’s sale, about four years
ago. The date, of course, remains the same, 1798, and all else
remains the same. The British Museum copy—it was Southey’s copy
—has the Bristol title-page, and the Museum may possibly acquire a
copy with Mr. Arch’s when opportunity occurs. In the only copy of the
First Edition which they have at present, the words are, ‘Bristol,
printed by Biggs and Cottle, for T. N. Longman, Paternoster Row,
London.’ Thus the First Edition of five hundred was divided—say two
hundred for Mr. Cottle, say three hundred for Mr. Arch when the
Bristolian found the sale was ‘slow’ and ‘heavy.’ Where have they all
gone to? It was only eighty-four years ago. But where have all the
copies of the big edition of the Christmas Carol gone to? That was
hardly forty years ago.
To recall a little the origin of the book—the circumstances under
which Wordsworth and Coleridge planned and produced it. It was in
the Nether Stowey and Alfoxden time, when the men were
neighbours, three miles of green Somerset country dividing the
home of Coleridge from the home of Wordsworth. I saw the place—
that is, the neighbourhood, and Coleridge’s home—a few years
since, much in that summer weather which tempted their own more
prolonged wanderings, which followed them in that excursion to
‘Linton and the Valley of Stones,’ which was the first cause,
Wordsworth says, of the issue of Lyrical Ballads. Plain living and
high thinking they practised then, and from necessity as much as
from choice. A yeoman of Somerset would hardly have lived at that
time—and certainly he would not live to-day—in the cottage which
was Coleridge’s. Straight from the country road you step to its door:
in an instant you are in the small square parlour, with large kitchen-
like fireplace, with one, or, I think, two small windows, and a window-
seat from which, on days of evil weather, the stay-at-home
commanded the prospect of the passing rustic as he walked abroad
—perhaps of the occasional traveller on his way to the village inn.
But generally, fair weather or foul, the spectacle was scanty—time
was marked by shifting light and changes in the colour of the sky, or
by the movements of beasts at milking-time, or at hours of rest and
of labour. Never, I should say, was one hour merely frittered away by
either the poet who lived or the poet who visited in that humble
cottage. Never a call of ceremony: an interview that bears no fruit—a
social necessity, the continual plague of cities. Never an hour that
did not tell in some way, by active work, or by ‘wise passiveness,’
upon the mind that was to be cultivated and the character that was to
be developed. Such a life, led not in actual isolation, but in narrowed
and selected companionship, was perhaps about the best
preparation men could make for work of the concentrated and the
self-possessed power of the ‘Ancient Mariner,’ and of the serene
profundity of the lines connected with Tintern Abbey. This was the
place, and these were the conditions, for the quietude of life and
thought felt as the greatest necessity of existence by Wordsworth, ‘a
worshipper of Nature,’ ‘unwearied in that service.’
In 1797 came the first thought of the book. Wordsworth’s
account of it may already be familiar. Prefixed in later editions to the
poem of ‘We are Seven,’ which was printed for the first time in Lyrical
Ballads, is a note which says: ‘In reference to this poem I will here
mention one of the most noticeable facts in my own poetic history,
and that of Mr. Coleridge.’ And then he tells the story: ‘In the autumn
of 1797, he, my sister, and myself started from Alfoxden pretty late in
the afternoon, with a view to visit Linton and the Valley of Stones
near to it; and, as our united funds were very small, we agreed to
defray the expense of the tour by writing a poem, to be sent to the
New Monthly Magazine, set up by Phillips, the bookseller, and edited
by Dr. Aikin. Accordingly, we set off, and proceeded along the
Quantock Hills towards Watchet; and in the course of this walk was
planned the poem of the “Ancient Mariner,” founded on a dream, as
Coleridge said, of his friend Mr. Cruikshank.’ And then Wordsworth
adds some details which are characteristic. ‘Much the greatest part
of the story was Mr. Coleridge’s invention,’ he says; ‘but certain parts
I suggested.’
Now, what were those parts? They were parts which yield to no
other in importance, and which do very much to throw over the work
the glamour of noble imagination, the sudden magical charm which
was Wordsworth’s own, and with which he was accustomed to
illumine the commoner themes of his habitual choice. It was
Wordsworth’s suggestion that the Ancient Mariner should be
represented as having killed the Albatross, and that ‘the tutelary
spirits of these regions’—the regions of the South Sea—‘should take
upon them to avenge the crime.’ ‘I also suggested the navigation of
the ship by the dead men, but do not recollect that I had anything
more to do with the scheme of the poem.’ A detail, however, he had
to do with. ‘I furnished two or three lines at the beginning of the
poem, in particular—
“And listened like a three years’ child:

The Mariner had his will.”
These trifling contributions, all but one, which Mr. C. has with
unnecessary scrupulosity recorded, slipped out of his mind, as they
well might.’
If the contributions themselves were characteristic, so certainly is
the manner of speaking of them. These men, and the men who were
more or less their associates, believed much in each other. In no
different spirit from Wordsworth’s did Coleridge himself write, in his
introduction to Poems on Various Subjects, these words about
Charles Lamb: ‘The effusions signed C. L. were written by Mr.
Charles Lamb, of the India House; independently of the signature,
their superior merit would have sufficiently distinguished them.’ And
in no different spirit did Coleridge write of Wordsworth, years
afterwards, in the Biographia Literaria, when their ways had parted.
He could explain generously then ‘what Mr. Wordsworth really
intended’ by the theories put forward in that famous preface which
was too much for Coleridge.
But to return to the book—or rather, for the moment, to
Wordsworth’s account of it. As the friends endeavoured to proceed
conjointly in the construction of the ‘Ancient Mariner’—it was still that
same evening in which the poem was conceived—their respective
manners proved so widely different that it would have been, to
Wordsworth’s mind, ‘quite presumptuous in me to do anything but
separate from an undertaking upon which I could only have been a
clog.’ ‘The “Ancient Mariner” grew and grew,’ he adds, ‘till it became
too important for our first object, which was limited to our expectation
of five pounds; and we began to think of a volume, which was to
consist, as Mr. Coleridge has told the world, of poems chiefly on
supernatural subjects taken from common life, but looked at, as
much as might be, through an imaginative medium.’ That
‘imaginative medium’ was to distinguish these poems, we have been
told elsewhere, from the rhymed stories of Crabbe. Poetic realism
and prosaic realism, and what a world between them!
In April 1798 Wordsworth wrote to his friend, the Bristol
bookseller: ‘You will be pleased to hear that I have gone on adding
very rapidly to my stock of poetry. Do come and let me read it to you
under the old trees in the park.’ Definite proposals, too, were to be
made; and it was written to Cottle—this time, I think, by Coleridge
—‘We deem that the volumes offered to you are, to a certain degree,
one work in kind.’ That same spring, but later on, Cottle did visit
Nether Stowey, and he writes of it in his own book of interesting if
sometimes illegitimate gossip: ‘At this interview it was determined
that the volume should be published under the title of Lyrical Ballads,
on the terms stipulated.’ Thirty guineas seems to have been
Wordsworth’s share. And, furthermore, it was settled that it should
not contain the poem of ‘Salisbury Plain,’ but only an extract from it
—Cottle himself, nevertheless, thought that poem the finest
Wordsworth had written; that it should not contain the poem of ‘Peter
Bell,’ but consist rather of shorter poems, and for the most part of
pieces more recently written. ‘I had recommended two volumes,’
Cottle tells us, ‘but one was fixed on, and that to be published
anonymously.’ All which speedily came about. Cottle further says,
‘The volume of the Lyrical Ballads was published about midsummer,
1798.’ But it was not really till some while after midsummer, for not
only were the Tintern Abbey lines, which close the little volume with
so august a calm, not written till the 13th of July, but it is said
expressly in Wordsworth’s Life that as late as September the 13th
the book was ‘printed, not published.’ Some weeks before,
Wordsworth and his sister took up temporary abode in Bristol, that
they might be near the printer. Then, at length, in the early part of
autumn, the Lyrical Ballads appeared, and Wordsworth and his
sister, and Coleridge, left England for Germany.
To the first edition of Lyrical Ballads is prefixed four pages of
‘Advertisement,’ or preface. About it two or three points are
noticeable. First, it gives no hint that two poets have been engaged
upon the volume: ‘the author,’ who speaks of himself in the third
person, is responsible alike for the ‘Ancient Mariner’ and for ‘Goody
Blake and Harry Gill.’ Secondly, it is written in that familiar language
—just our daily speech a little chastened and braced—which
Wordsworth employed at the beginning, and employed to the end.
Again, it utters, thus early in Wordsworth’s life, that note of warning
as to mistaken notions of what Poetry demands, which the writer
repeated afterwards with infinite elaboration. ‘It is the honourable
characteristic of Poetry that its materials are to be found in every
subject which can interest the human mind’—that is, by implication,
his first apology for the choice of humble theme. ‘Readers of superior
judgment may disapprove of the style in which many of these pieces
are executed: it must be expected that many lines and phrases will
not exactly suit their taste.’ Expressions may seem too familiar—may
seem lacking in dignity. But, ‘it is apprehended that the more
conversant the reader is with our elder writers, and with those in
modern times who have been most successful in painting manners
and passions, the fewer complaints of this kind will he have to make.’
Here is the apology for the fashion of presentation—the germ of that
which was afterwards so fully developed in famous writings which
borrowed here and there a neat and significant phrase from this first
‘Advertisement.’
The title of the ‘Ancient Mariner’ begins the table of contents,
and the poem runs on to the fifty-first page of the volume—nearly a
quarter of all that the volume holds. But Coleridge’s remaining
contributions were small and few, consisting of ‘The Nightingale,’ and
of but one other. That he made even these contributions has
sometimes escaped people’s notice. He had intended to do more, for
he tells us in the Biographia Literaria that, having written the ‘Ancient
Mariner,’ he was preparing, among other poems, ‘The Dark Ladie’
and the ‘Christabel.’ ‘But Mr. Wordsworth’s industry has proved much
more successful, and the number of his poems so much greater, that
my compositions, instead of forming a balance, appeared rather an
interpolation of heterogeneous matter.’ When the ‘Ancient Mariner’
came to be reprinted—under Coleridge’s banner alone—some minor
changes were made. Some of them were gains, but some were
losses. And there was added then, what the Lyrical Ballads does not
contain, the ‘Gloss’—that wonderful telling of the story and yet
departing from it—which is set forth in grave and inspired prose. ‘It
was an afterthought,’ Wordsworth tells us, in speaking of his friend’s
poem.
Of Wordsworth’s own share—that far greater share of his—in the
poems, it is interesting to notice how the general title, Lyrical Ballads
with a few other Poems, is required to cover the whole of it. For they
are of two kinds—Wordsworth’s poems in the volume—the simple
stories of humble life, which may or may not be dramatic, in which
the ‘I’ of the poet is not necessarily himself, and the poems which
record unmistakably his personal feeling and experience, such as
‘The Tables Turned, an Evening Scene,’ the noble lines written near
Tintern Abbey, and the small poem which rejoices in perhaps the
longest title ever bestowed upon verse, ‘Lines written at a small
distance from my house, and sent by my little boy to the person to
whom they are addressed.’ These, and one or two others, are the
contributions to which Coleridge refers when he says that ‘Mr.
Wordsworth added two or three poems written in his own character,
in the impassioned, lofty, and sustained diction which is
characteristic of his genius.’
Many of Wordsworth’s verses, whether of the one class or the
other, in the Lyrical Ballads, bear reference to the circumstances of
the moment and the place—are stamped with the mark of his
Alfoxden sojourn. ‘The Thorn’ arose out of his observing on the ridge
of Quantock Hill a thorn on a stormy day. He had often passed it
unnoticed in calm. ‘I said to myself, Cannot I by some invention do
as much to make this Thorn prominently an impressive object as the
storm has made it to my eyes at this moment? I began the poem
accordingly, and composed it with great rapidity.’ He adds that Sir
George Beaumont painted a picture from it, which Wilkie thought his
best. Wilkie—sagacious Scotsman!—did not commit himself too
much by such praise. But Wordsworth thought the picture nobly
done. The only fault of any consequence, he said, was the woman’s
figure—too old and decrepit ‘for one likely to frequent an eminence
on such a call.’ ‘Expostulation and Reply,’ which Wordsworth learned
was a favourite among the Quakers, was composed in front of the
house at Alfoxden, in the spring of 1798. ‘The Tables Turned’ was
composed at the same time, in praise of the
Spontaneous wisdom breathed by health,

Truth breathed by cheerfulness.
And of ‘The Last of the Flock,’ the author says that the incident
occurred in the village of Holford, close by Alfoxden.
But I think the most interesting of the records is the record of ‘We
are Seven.’ This was composed while walking in the favourite grove.
In Wordsworth’s confession that he composed the last stanza first,
we get at the secret of how entirely the subject had struck him from
the spiritual side.
‘But they are dead; those two are dead!

Their spirits are in heaven!’
’Twas throwing words away, for still
The little maid would have her will,
And said, ‘Nay, we are seven!’
The life of the poem lies in the instinctive thought of immortality,

and in the sense of neighbourhood and close companionship
between the quick and the dead. It is the same thought, the same
sense, that throws its magical light on the tale of Lucy Gray, and
permits those last verses which make the whole thing wonderful, and
the common story fine—
Yet some maintain that to this day

She is a living child;
That you may see sweet Lucy Gray
Upon the lonesome wild.
O’er rough and smooth, she trips along
And never looks behind;
And sings a solitary song
That whistles in the wind.
The poem of ‘We are Seven,’ expressing a conception precious

to Wordsworth, yet not expressing it exactly as he would have it
expressed, was, after its first publication, subjected to more changes
than any composition of its length. Of course the direct address to
‘dear brother Jem’—‘A little child, dear brother Jem’—is removed.
Wordsworth only allowed it to stand at first because he relished the
joke of hitching in his friend James Tobin’s name, and this gratuitous
reference to a good fellow, a bad critic, and the brother of the author
of ‘The Honeymoon,’ was promptly suppressed. ‘I sing a song to
them,’ is substituted for a line far more effective with the context—‘I
sit and sing to them.’ Another line, beautiful with the context—‘And
all the summer dry’—yields to the line ‘And when the grass was dry.’
But at one point ‘little Jane’ becomes ‘sister Jane,’ perhaps happily,
and, ‘Quick was the little maid’s reply’ gives the desired sense of
readiness and certainty better than the line it effaces. It is the old
story of careful verbal alterations—some are for the better, some are
for the worse.
More than one of the graver pastoral poems are missing,
naturally enough, to my rare book. I do not find in it that pastoral of
‘Michael,’ which of itself is quite enough, it seems to me, to ensure to
its writer a fame which shall last as long as any judges of Literature
remain—any judges who, caring for style itself, care supremely for its
fit association with the sentiment it is its business to express.
‘Michael’ is intensely realistic: in the best sense it is more realistic
than anything of Crabbe’s, and the verse that seems to be halting is
but prosaic deliberately. The effect is sought for, and the effect is
gained. The pathos is all the greater because the elevation of
language is so slight and infrequent. When it occurs, it tells! That
poem belongs to the next series of the poet’s works—to the little
collection published first, I think, in 1802, and assuming to itself the
title of Lyrical Ballads; Volume the Second. There had before been
no hint of a second, and the first is complete in itself.
I said, just now, in speaking of the ‘We are Seven,’ that Mr.
James Tobin—‘dear brother Jem’—was a bad critic. He showed
himself so in this wise. When Lyrical Ballads was going through the
press, it was Cottle, I suppose, who gave a sight of it to dear brother
Jem. He went to Wordsworth upon that, as one charged with a
mission, and who would not be denied. There was one poem,
brother Jem said, in the volume about to be published, which
Wordsworth must cancel. ‘If published, it will make you everlastingly
ridiculous.’ And Wordsworth begged to know which was the
unfortunate piece. He answered, ‘It is called, “We are
Seven.”’—‘Nay,’ said Wordsworth, ‘that shall take its chance,
however.’ For he knew his strength. And another generation has
reversed the judgment which Tobin’s approved.
(Gentleman’s Magazine, May 1882.)

BALZAC
Through the ‘usual channels of information’—I mean, of course, the
daily papers—many readers have become aware of the recent
publication, in the Revue de Paris, of a series of Balzac’s letters. But
few have understood their importance. Their interest for the student
is great, for in a revelation of their author, that is impressive and
almost final, they confirm to the full the view of Balzac which those of
us have taken (I took it myself in my little Life of him in the ‘Great
Writers’ Series) who have perceived that by his temperament and
inclination, as well as by his power, he is divided widely from those
more sordid and limited realists at whose head it was erewhile the
fashion to place him. Romance, it has been claimed—often by friend
and foe alike—Romance was Victor Hugo’s, Materialism was
Balzac’s. And now Balzac is found—and one has a right to be
surprised, not of course at the kind, but only at the degree of the
manifestation—he is found in mature years to be in his own conduct
more simply and absolutely romantic than the most visionary or most
warm-hearted schoolgirl. He works himself into a genuine and
indescribably enthusiastic, but always respectful, attachment to a
young married woman whom he has never seen, who inquires of him
about his stories, who sends him Thomas à Kempis (which he
translates later into the Médecin de Campagne: ‘c’est l’Evangile en
action’), who writes to him confidentially for a year or two before she
meets him, who later receives him as her guest in Russian Poland,
and whom he marries at last, in 1850, only several years after the
death of her husband.
The facts that have been mentioned latest have been known
since about the time of the publication of the now familiar couple of
volumes of Balzac’s Correspondence. It is the earlier and most
interesting part of the story that is new. The report had previously
been current that Balzac had for the first time been made aware of
Madame de Hanska’s existence when he was staying at, or passing
through, Neuchâtel, in September 1833. She announced, so it was
said, her wish to be introduced to him on hearing that he was at the
hotel; and this last autumn (such is the vanity of human effort upon
matters after all not profoundly important), I established the fact, in
concert with the present proprietor of the Hôtel Belle Vue at
Neuchâtel, that the old but not yet disused Hôtel du Faucon must
have been the hostelry in which this memorable meeting took place.
The ‘Faucon,’ which had been built just in the middle of the little town
but a few years before the date of Balzac’s visit, was then the inn at
which a traveller of any importance was sure to descend—neither
the ‘Belle Vue’ nor the ‘Lac’ existed at that period. Let us take
courage, however—our trouble was not so useless as I had for a
moment imagined it. The actual meeting-place of two friends, two
‘lovers’ (in Walt Whitman’s sense, at all events), is in the end at least
as interesting as the meeting-place of two strangers, who were to
warm towards each other only in future years. They met, then, we
may fairly presume, at the Faucon at Neuchâtel, but met after a
correspondence by turns polite and chivalrous, intimate and ardent.
It was no unusual thing for Balzac—the historian, above all
things, of men’s ambitions and of women’s hearts—to receive,
together with the compliments, the confessions of the fair. In our own
age—an age perhaps more enamoured of physical prowess and
presence than of intellectual or spiritual achievement—I have not
heard that the novelist or the successful writer of the short story is in
constant receipt of the confidences and eulogiums of women. These,
I am informed, when bestowed liberally on the stranger, are directed,
nowadays, in chief to the jeune premier with a rapid action and a
well-made coat. But it was otherwise two generations ago; and
Balzac, sometimes complaining of the embarrassment, sometimes,
on the other hand, with not a little of honest pride in the
circumstances that caused it, avows himself endowed with the
functions of a confessor. In the two volumes of the well-known
Correspondence I have referred to before, and in such other writings
as have hitherto been accessible, it is chiefly question of a certain
anonymous ‘Louise,’ whom he never saw, to whom he said many
pretty things on writing-paper, and to whom he was once minded to
dedicate one of his stories. As a rule, I believe, he left unanswered
the letters of the stranger—felt, perhaps, that it was enough that they
should have been received, and, if they contained anything that was
noteworthy, registered, very likely, in the book of his memory for
possible employment in fiction. But now it is made clear abundantly,
that in the case of Evelina de Hanska, not only was there
correspondence, intimate if scarcely voluminous, before any
personal meeting, but likewise that by means of it such a tie was
created, such a mutual fascination formed, as could hardly with ease
be broken. And yet, what if when they met in the flesh there had
been—as after all there might have been—disillusionment! What if
Evelina de Hanska had proved as distasteful to Monsieur de Balzac
as Anne of Cleves to the experienced Henry!
He was in the best of all possible moods, however, to be
impressed with Madame de Hanska, during the period of their
earliest correspondence; for unquestionably he was wounded,
unquestionably he was sore. Among the friendships—verging
sometimes on love-affairs—which Balzac formed with women, two
were at this moment in the crisis of their fate. Many years before the
existence of Madame de Hanska became known to him, Balzac had
been friend, trustful dependant, would-be lover, probably—it is
difficult to express the relationship—of a certain Madame de Berny.
She was a little older than he was, and she helped him in money
troubles when he was young enough to be able to accept her
assistance without shame, and she knew the world at a time when, if
I may proffer the phrase, he joined the inextinguishable simplicity of
the artist to the more prosaic simplicity of the inexperienced.
At Madame de Berny’s house in the Oise, Balzac had written his
brief and restrained masterpiece, Le Curé de Tours. Her difficult
virtue, and all her other qualities and characteristics, made,
confessedly, much of the interest of Le Lys dans la Vallée. That
relationship of theirs—into which, as I consider, a morbid element, an
exaggerated sentimentality, did at one time to some extent enter—
was only wholly broken by Madame de Berny’s death. For two years
at least she was the victim of a mortal illness. The illness began, and
the depression caused by it in Balzac began, about 1833.
But during the year 1832, Balzac, whose feeling towards
Madame de Berny—‘an angel at my side’—must with long years
have somewhat changed its character—during the year 1832 Balzac
had passed through an experience the end of which he speaks of,
long afterwards, as ‘un des plus grands chagrins de ma vie.’ And
that was his experience with the young Madame de Castries—the
Duchesse de Castries she became, in due time, some years later—a
light of Parisian Society, fully as fascinating in the quietude of Aix-
les-Bains as amidst the distractions of all the salons of the capital. It
is not from the letters that Balzac wrote to her—not, at all events,
from any that have been published—that we know or can surmise
how irresistible for Balzac was her personal magnetism. It is rather
from certain amongst the letters sent by him to his life-long friend, his
sister’s school friend, Madame Zulma Carraud of Angoulême, that
we are informed of the effect of Madame de Castries’ dealings with
him. She was at one time a delight, then a disillusionment, and then
(and, as it seems to me, ever afterwards) a painful yet attractive
memory. The rupture—never a quarrel avowed to the outsider; never
indeed a rupture that was quite complete, or that was in any way
explicable save under the supposition that the lady of the belle
chevelure venitienne had a blonde’s inconstancy and a Scottish
caution—the rupture, such as it was, occurred in the autumn of
1832, when Balzac, who was to have gone over into Italy with the
lady and her brother, parted from her at Geneva, and consoled
himself (let me be permitted to hope) as best he could, by buying, at
1
that famous dealer’s on the Quai des Bergues, a little of the ‘Carl
Théodore’ (Frankenthal) porcelain that his soul loved. The ‘collector,’
I am informed, is heartless—but he has his compensations.
1
Since moved to the Corratorie.
The second of the just published letters addressed to Madame

de Hanska contains sentences which are meaningless, if it is not to
Madame de Castries that they refer. ‘Only Heaven and I can ever
understand the frightful energy with which a heart must be endowed,
if, being full of tears that are repressed, it must suffice still for the
labours of writing.’ Again—and this time why should I translate?—the
cry of a moment: ‘Toutes mes passions, toutes mes croyances, sont
trompées.’ And he tells his correspondent that Madame Recamier at
2
least never sat, as was supposed, for Feodora. ‘I met a Feodora
once, but her I shall never paint; besides, the Peau de Chagrin was
3
written long before I met her.’ Yet again, ‘I made Feodora out of two
women whom I knew, but not intimately. Observation was enough for
me—with a few confidences to boot.’
2
Feodora, the evil genius, one may say, of the
Peau de Chagrin.
3
If this was Madame de Castries, the intention
did not always hold good, since more than
touches of that charmer there are supposed to
be in the Duchesse de Langeais.
What Balzac seems to have been struck with, from the first, in
Evelina de Hanska, was her sincerity and oneness of purpose, the
truth of her devotion to his work, and a certain similarity, an
immediate sympathy, between his nature and hers. Much of his
work, as he avows, has been done to strike the public—to provide
the public with that without which it could scarcely accord him the
attention he asked. But ‘certainly there are books in which I have
loved to be myself; and you will know well which they are, for they
are those in which my heart has spoken.’ When at length the two
came together, at Neuchâtel in 1833—as in Vienna, and in Russian
Poland itself, in later years—there was nothing, it seems, in either to
diminish the interest or to break the spell. And the fascination
continued. I have for my own part a little theory that the sympathy of

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Nonlinearities in Economics: An

Interdisciplinary Approach to Economic

Cancer Treatment - An Interdisciplinary Approach - An

An Introduction to Economic Dynamics: Modelling,

Principles of environmental economics and

Modelling Trends and Cycles in Economic Time Series 2nd

Science Technology and Modernity An Interdisciplinary

An Impulse and Earthquake Energy Balance Approach in

Cultures of Stone An Interdisciplinary Approach to the

Network Algorithmics An Interdisciplinary Approach to

More information about this series at http://www.springer.com/series/5859

ISSN 1566-0419 ISSN 2363-8370 (electronic)

New York, NY, USA Willi Semmler

Handling nonlinear dynamic phenomena has always been a difficult challenge in

Munich, Germany Stefan Mittnik

Princeton, New Jersey, USA Markus Brunnermeier

Rather unanticipated, this book became a demonstration of how fruitful scientific

Bari, Italy Giuseppe Orlando

Part I Mathematical Background

Part II Signal Analysis and Modelling Tools for Economic

10 Recurrence Quantification Analysis: Theory and Applications .. . . . . . 141

Part III Emergence of Cycles and Growth in Economics

Part IV New Horizons for Understanding Economics

Ricardo Azevedo Araujo University of Brasilia, Department of Economics,

Giovanni Taglialatela Department of Economics and Finance, Bari, Italy

Giuseppe Orlando, Alexander N. Pisarchik, and Ruedi Stoop

Philosophy is written in this grand book, the universe, which

1.1 Nonlinearity and Unpredictability in Economics

Until the twentieth century, many mathematical economists, such as Francis

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 1

1.2 Scheme of This Book

importance of nonlinear analysis and outline methodological prospects of dynamical

1. Arrow, K.J., Hahn, F.: General Competitive Analysis. Holden-Day (1971)

Giuseppe Orlando and Giovanni Taglialatela

2.1 Dynamical Systems and Their Classification

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2021 13

φ(t, t1 , x ∗ ) = x ∗ , for all t ∈ T ∩ [t1 , t2 ] .

φ(t, t1 , x ∗ ) = x ∗ for all t ∈ T ∩ [t1 , +∞[ .

Definition 2.5 (Eventually Fixed Orbit) An orbit is said to be eventually fixed if

The fixed point x ∗ is globally asymptotically stable if it is stable and

Definition 2.8 (Autonomous System) The system is called autonomous if

for some suitable function 

2.2 Continuous-Time Dynamical

2.2.1 Continuous-Time Dynamical Systems from Ordinary

Let I = [a, b] ⊂ R and let f : I × R → R.

for any t ∈ I and x1 , x2 ∈ R. Then for any τ ∈ I , ξ ∈ R the Cauchy problem

has a unique solution in [a, b].

(i.e. in the case of a differential equation of the form ẋ = f (x), with f : R → R

φ(t, τ, x) = φ(t − τ, 0, x) for all t, τ, x ∈ R. (2.5)

An equilibrium point is a solution of the differential equation ẋ = f (x), which

2.2.2 Continuous-Time Dynamical Systems from Systems of

Assume that f1 , f2 , . . . , fn are continuous functions in I × Rn , that the partial

has one and only one solution on the interval I .

defines a reversible continuous dynamical system.

2.3 Stability of Continuous-Time Systems

We recall some known facts about the exponential of square matrix.

The basic properties of the exponential are listed below:

When we deal with a linear system of differential equations expressed in matrix

of the equilibrium. To this end, we need to introduce the following definitions

for some suitable function

For example, if g(x) = x 2 − a, g (x) = 2x, then the Newton algorithm in

(f ◦n ) (xp ) = f (xp ) f (f (xp )) · · · f (f ◦n−1 (xp )). (2.18)

|(f ◦n ) (xp )| = 1. (2.19)

The number (f ◦n ) (xp ) is called a hyperbolic point multiplier.