A non-linear model of economic production processes

A. Ponzi, A. Yasutomi and K. Kaneko

Physica A: Statistical Mechanics and its Applications, 2003, vol. 324, issue 1, 372-379

Abstract: We present a new two phase model of economic production processes which is a non-linear dynamical version of von Neumann's neoclassical model of production, including a market price-setting phase as well as a production phase. The rate of an economic production process is observed, for the first time, to depend on the minimum of its input supplies. This creates highly non-linear supply and demand dynamics. By numerical simulation, production networks are shown to become unstable when the ratio of different products to total processes increases. This provides some insight into observed stability of competitive capitalist economies in comparison to monopolistic economies. Capitalist economies are also shown to have low unemployment.

Keywords: Economic dynamics; Evolutionary systems; Reaction networks; Non-linear dynamics (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:324:y:2003:i:1:p:372-379

DOI: 10.1016/S0378-4371(02)01885-X

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