On Market Economies: How Controllable Constructs Become Complex
C-Rene Dominique () and
Luis Eduardo Rivera-Solis
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Luis Eduardo Rivera-Solis: Dowling College, New York, United States
Expert Journal of Economics, 2014, vol. 2, issue 3, 100-108
Since Leon Walras neoclassical economists hold an inalterable belief in a unique and stable equilibrium for the economic system which however remains to this day unobservable. Yet that belief is the corner stone of other theories such as the 'Effi-cient Market Hypothesis' as well as the philosophy of neo-liberalism, whose out-comes are also shown to be flawed by recent events. A modern market economy is obviously an input/output nonlinear controllable construct. However, this paper examines four such models of increasing complexity, including the affine nonline-ar feedback H-control, to show that the 'data requirement' precludes all attempts at the empirical verification of the existence of a stable equilibrium. If equilibria of complex nonlinear deterministic systems are most likely unstable, multiple or deterministically chaotic depending on their parameter values and uncertainties, then society should impose limits on the state space and focus on endurable pat-terns thrown-off by such systems.
Keywords: Equilibrium; nonlinearity; controllability; nonlinear feedback; H-control; complexity (search for similar items in EconPapers)
JEL-codes: C61 C62 C68 C68 D57 D58 (search for similar items in EconPapers)
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Working Paper: On Market Economies: How Controllable Constructs Become Complex (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:exp:econcs:v:2:y:2014:i:3:p:100-108
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