A Comparative Study of the Efficiency of Ponzi Vs. No-Ponzi Economic System Based on Agent-Based Modeling

Narges Javidi Abdollahzadeh Aval (), Ahmad Assad Zadeh () and Sedaghat Shahmorad ()
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Narges Javidi Abdollahzadeh Aval: PhD Student in Economics, University of Tabriz
Ahmad Assad Zadeh: Associate Professor of Economics, University of Tabriz
Sedaghat Shahmorad: Professor of Applied Mathematics, University of Tabriz

Quarterly Journal of Applied Theories of Economics, 2019, vol. 6, issue 3, 73-102

Abstract: One of the main concerns of economic scholars and thinkers is to predict the behavior of individuals in an economic system. Although economists often use complex mathematical equations for economic analysis, in recent decades due to the weakness of forecasting analyses based on equations and inability of such equations to justify empirical events, economists have used modeling and simulation methods. In other words, they are looking for ways to justify complex phenomena in the economy as a complex system. In addition to applying complexity theory, this research attempts to introduce a research tool to scholars for the simulation of agent-based research. In this study, we will examine the efficiency of each system by developing an agent-based model based on a No-Ponzi economic system and comparing it with a Ponzi economic model. We will also examine the effects and consequences of some economic behaviors that are contrary to the ethics and teachings of Islam. Comparing the two models, the results indicate that the No-Ponzi model has a better human development index and more social welfare.

Keywords: Agent-based modeling; Islamic economics; Wealth distribution; Gini coefficient; Consumption; Saving; Wealth (search for similar items in EconPapers)
JEL-codes: C53 E21 E52 E58 F14 F17 (search for similar items in EconPapers)
Date: 2019
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