16Economic Dynamics(1)the time-evolution values,(2)the parameter values, and(3)the initial conditions.A system for which all three are known is said to bedeterministic. If such a de-terministic system exhibits chaos, then it is very sensitive to initial conditions.Given very small differences in initial conditions, then the system will after timebehave very differently. But this essentially means that the system isunpredictablesince there is always some imprecision in specifying initial conditions,5and there-fore the future path of the system cannot be knownin advance. In this instancethe future path of the system is said to beindeterminableeven though the systemitself isdeterministic.The presence of chaos raises the question of whether economic ﬂuctuationsare generated by the ‘endogenous propagation mechanism’ (Brock and Malliaris1989, p. 305) or from exogenous shocks to the system. The authors go on,Theories that support the existence of endogenous propagation mechanisms typ-ically suggest strong government stabilization policies. Theories that argue that
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