Impact of investor confidence on government debt-induced financial system with investment delay

In this paper, we have developed and analyzed a financial model that investigates the influence of government debt and investor confidence on the system’s stability with investment delay feedback. The model’s solution’s basic properties, existence and uniqueness are discussed. The equilibria of the system are obtained, and local stability at each equilibrium is examined. Hopf bifurcation analysis has been performed at each existing equilibria of the model. It is reviewed that when investor confidence was negligible, the system dynamics changed from stable to unstable as the parameter value of government debt increased. Also, it shows that a higher level of investor confidence can significantly affect the system’s dynamics. Furthermore, we investigate the impact of time delay on system behaviors, and numerical results are given to show the effectiveness of the theoretical results.