We investigate the effect of delayed feedback on the finance system, which describes the time variation of the interest rate, for establishing the fiscal policy. By local stability analysis, we theoretically prove the existences of Hopf bifurcation and Hopf-zero bifurcation. By using the normal form method and center manifold theory, we determine the stability and direction of a bifurcating periodic solution. Finally, we give some numerical solutions, which indicate that when the delay passes through certain critical values, chaotic oscillation is converted into a stable equilibrium or periodic orbit.

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