Non-self-averaging and the statistical mechanics of endogenous macroeconomic fluctuations

Masanao Aoki and Raymond J. Hawkins

Economic Modelling, 2010, vol. 27, issue 6, 1543-1546

Abstract: Strong fluctuation phenomena are an endogenous feature of economic systems if they are non-self-averaging. We show that an important consequence of non-self-averaging is that current forms of economic policy can be rendered useless. We also find non-self-averaging both to exist in microeconomic models of cluster development within economies and to be consistent with observed economic power laws. These results suggest the need for straightforward identification of non-self-averaging in economic systems and to this end we present a sufficient condition for non-self-averaging in terms familiar to financial risk management.

Keywords: Macoeconomic; models; Dynamics; Non-self-averaging (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (5)

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