article · Results in Control and Optimization
An enhanced Rössler mathematical system models dynamic financial interactions by integrating minimum interest rates and maximum investment demands. The framework applies the Caputo fractional order derivative to assess temporal dynamics, specifically evaluating the memory effects that influence market stability and volatility across time. Mathematical proofs establish the existence and uniqueness of solutions within the system, confirming its reliability. Numerical solutions generated using the homotopy perturbation method, along with simulation results, demonstrate a positive correlation between maximum investment demand and interest rates. These results demonstrate that long-term dependencies and non-local influences strongly affect interest rate behaviour. Ultimately, the system provides theoretical insights into nonlinear financial interactions, offering analytical guidance for managing financial uncertainties and optimising investment strategies to support broader market stability.
Financial markets are nonlinear and influenced by past behaviour and historical memory. By capturing memory effects through fractional calculus, this modelling approach improves the mathematical understanding of how investment demand affects interest rate volatility. These theoretical insights help analysts better comprehend complex market behaviours, navigate systemic uncertainties, and design strategies aimed at maintaining long-term financial stability.
This work is early-stage theoretical and numerical modelling rather than an applied commercial product. It could eventually inform analytical software used by financial analysts, risk managers, or economic policy planners seeking to evaluate investment demand and interest rate scenarios. However, the abstract indicates no software implementation, real-world data validation, or testing against live markets, placing the research at a fundamental, pre-commercial stage.
AI-generated from the published abstract. Always read the original work before citing.
A key model for predictive analysis, particularly in finance, is the Rössler system. This study introduces an enhanced version of this model, incorporating minimum interest rates and maximum investment demands. To capture its temporal dynamics, we used the Caputo fractional order derivative, which allowed us to evaluate the memory effect that underpins these factors’ financial stability and volatility over time. The research establishes the existence and uniqueness of the model solution, confirming its reliability. Numerical solutions obtained via the homotopy perturbation method and simulations reveals a positive correlation between maximum investment demand and interest rates, highlighting the significant impact of long-term dependencies and non-local influences of demands on interest rates. The insights provide valuable guidance for navigating financial uncertainties and optimizing investment strategies for market stability, deepening our understanding of relationships in nonlinear financial systems.
This page summarises published work. The authoritative version sits with the publisher.
DOI: 10.1016/j.rico.2023.100349
Is something wrong with this record? Report it or request removal.
Discussion
Have you built on this work, tried to replicate it, or seen it applied in practice? Share what you know. Verified researchers and MARATTO™ domain experts can open a discussion, and any member can reply. Contributions are reviewed before they appear.
No discussion yet. Open the first thread.
New to MARATTO™? Create a free account.
