Abstract:This paper, studied the stability and Hopf bifurcation of an economic model. According to its characteric roots, the critical condition on which the system loses its stability was derived. Then pseudooscillator analysis and iteration method were conducted on the system. In this way, the direction of the Hopf bifurcation and the amplitude of bifurcated periodic solution can be obtained in a simple way. Besides, numerical examples were given to show the effectiveness of the methods. Specially, compared with the pseudooscillator analysis, the solution from iteration method is more accurate as the amplitude of bifurcated periodic solution increases. Though the system loses stability when the Hopf bifurcation occurs, the bifurcated periodic solution still keeps stable by varying the parameters within a certain range, which means that the system can reach a beneficial economical cycle.