The Autopoietic Model of Economic Reproduction (AMER)

Paata Leiashvily

MPRA Paper from University Library of Munich, Germany

Abstract: Classical general equilibrium theory specifies the conditions under which equilibrium may exist, but offers limited insight into the dynamics of its attainment. This paper addresses that gap by developing a recursive dynamic formulation of the Symmetric Model of General Economic Equilibrium, interpreted here as the Autopoietic Model of Economic Reproduction (AMER). The economy is represented as an operationally closed system in which products and resources recursively reproduce one another through decentralized exchange and feedback. The analysis shows that, once realistic time lags in price transmission between interdependent product and resource markets are introduced, the adjustment process does not converge to equilibrium but generates persistent endogenous oscillations. Explicit analytical conditions for the emergence of such dynamics are derived and linked to behavioral parameters, including the speed of price adjustment, demand inertia, and cyclical changes in the propensity to save and the propensity to expand production. These propensities are themselves influenced by optimistic and pessimistic expectations generated by the cycle. The paper further shows that this mechanism is robust across extensions with money, foreign trade, and multi-level production, thereby shifting the focus of general equilibrium analysis from equilibrium states to the recursive dynamics of decentralized coordination.

Keywords: general equilibrium; business cycles; recursive dynamics; endogenous instability; behavioral feedback; market coordination; autopoiesis; matrix models (search for similar items in EconPapers)
JEL-codes: C62 D50 E32 (search for similar items in EconPapers)
Date: 2026
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