Discrete Dynamics in Nature and Society
Volume 1 (1997), Issue 3, Pages 185-202

Catastrophe models and the expansion method: A review of issues and an application to the econometric modeling of economic growth

Emilio Casetti

Department of Economics, Odense University, Odense, Denmark

Received 15 May 1996; Revised 19 February 1997

Copyright © 1997 Emilio Casetti. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


Many negative reactions to Catastrophe Theory have been triggered by overly simplistic applications unintended and unsuited for statistical-econometric estimation, inference, and testing. In this paper it is argued that stochastic catastrophe models constructed using the Expansion Method hold the most promise to widen the acceptance of Catastrophe Theory by analytically oriented scholars in the social sciences and elsewhere. The paper presents a typology of catastrophe models, and demonstrates the construction and estimation of an econometric expanded cusp catastrophe model of economic growth.