Modeling of gross domestic product with foreign direct investment using Lotka-Volterra equations
This paper investigates the dynamic interaction between Gross Domestic Product (GDP) and Foreign Direct Investment (FDI) using two distinct numerical methods: The Fourth-Order Runge-Kutta (RK4) method on Lotka-Volterra model and a family of Least-Squares (LS) methods. The study aims to provide a com...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | en |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2025
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| Online Access: | http://journalarticle.ukm.my/26331/1/SMS%2015.pdf http://journalarticle.ukm.my/26331/ https://www.ukm.my/jsm/english_journals/vol54num9_2025/contentsVol54num9_2025.html |
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| Summary: | This paper investigates the dynamic interaction between Gross Domestic Product (GDP) and Foreign Direct Investment (FDI) using two distinct numerical methods: The Fourth-Order Runge-Kutta (RK4) method on Lotka-Volterra model and a family of Least-Squares (LS) methods. The study aims to provide a comparative analysis of these methods in terms of their accuracy, efficiency, and applicability in modeling the complex relationship between GDP and FDI. The RK4 method is employed to model the dynamic system governing the interaction between GDP and FDI. This method is chosen for its robustness in handling non-linear systems and its ability to provide precise numerical solutions with minimal computational error. On the other hand, the least squares method provides a static approximation by fitting a linear or nonlinear relationship between GDP and FDI. The paper conducts simulations using real-world data on GDP and FDI from Malaysia spanning the years 2009 to 2020. The results obtained from both methods are compared to assess their performance. The RK4 method on Lotka-Volterra model demonstrates superior accuracy in capturing the dynamic behavior of the GDP-FDI interaction, particularly in scenarios involving rapid changes or non-linear dynamics. |
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