Multi-scale Economic Dynamics: The Micro–Macro Wealth Dynamics and the Two-Level Imbalances of the Euro Crisis

Hanchao Yang (), Chenjie Shao and Khaldoun Khashanah
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Hanchao Yang: Stevens Institute of Technology
Chenjie Shao: Stevens Institute of Technology
Khaldoun Khashanah: Stevens Institute of Technology

Computational Economics, 2019, vol. 53, issue 2, No 5, 587-616

Abstract: Abstract We introduce a system of ordinary differential equations to model the micro–macro wealth dynamics of interactions between international enterprise competitiveness and the macroeconomic growth as an open system. The novelty of the approach is to postulate dynamic interaction between domestic and foreign companies and link this interaction to the GDP growth. The objective is to construct a micro–macro wealth dynamic model. By analyzing the market share data of the retail industry of 13 largest Eurozone countries as a system, our model suggests that the predator–prey relation exists. Under certain regimes, it is shown that foreign companies have a negative contribution to the GDP growth. Such dynamics reveals two levels of imbalances: company competitiveness and national economic growth.

Keywords: ODE system; Micro–macro wealth dynamics; Two-level imbalance; International competitiveness; Predator–prey relation (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s10614-017-9748-7

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