Related papers: Statistical mechanics of complex economies
The optimal (`equilibrium') macroscopic properties of an economy with $N$ industries endowed with different technologies, $P$ commodities and one consumer are derived in the limit $N\to\infty$ with $n=N/P$ fixed using the replica method.…
We propose a stylized model of a complex economy to explore the economic tradeoffs imposed by the so called "green transition" -- the shift towards more sustainable production paradigms -- using tools from the Statistical Mechanics of…
We study the competitive equilibrium of large random economies with linear activities using methods of statistical mechanics. We focus on economies with $C$ commodities, $N$ firms, each running a randomly drawn linear technology, and one…
Measures of wealth and production have been found to scale superlinearly with the population of a city. Therefore, it makes economic sense for humans to congregate together in dense settlements. A recent model of population dynamics showed…
We analyze the decisive role played by the complexity of economic systems at the onset of the industrialization process of countries over the past 50 years. Our analysis of the input growth dynamics, based on a recently introduced measure…
The origin of economic crises is a key problem for economics. We present a model of long-run competitive markets to show that the multiplicity of behaviors in an economic system, over a long time scale, emerge as statistical regularities…
The notion of (auto) catalytic networks has become a cornerstone in understanding the possibility of a sudden dramatic increase of diversity in biological evolution as well as in the evolution of social and economical systems. Here we study…
Network effects are the added value derived solely from the popularity of a product in an economic market. Using agent-based models inspired by statistical physics, we propose a minimal theory of a competitive market for (nearly)…
Poor economies not only produce less; they typically produce things that involve fewer inputs and fewer intermediate steps. Yet the supply chains of poor countries face more frequent disruptions---delivery failures, faulty parts, delays,…
The evolution of economic and innovation systems at the national scale is shaped by a complex dynamics, the footprint of which is the nested structure of the activities in which different countries are competitive. Nestedness is a…
Modern economies evolved from simpler human exchanges into very convoluted systems. Today, a multitude of aspects can be regulated, tampered with, or left to chance; these are economic {\em degrees of freedom} which together shape the flow…
Societal complexity may be at a historical peak. Distinct from entropy, complexity tends to rise as systems move away from order, crest at an intermediate state, and decline as entropy continues increasing. The use of a thermodynamic…
Many complex systems satisfy a set of constraints on their degrees of freedom, and at the same time, they are able to work and adapt to different conditions. Here, we describe the emergence of this ability in a simplified model in which the…
Knowhow in societies accumulates as it gets transmitted from group to group, and from generation to generation. However, we lack of a unified quantitative formalism that takes into account the structured process for how this accumulation…
We use a simple combinatorial model of technological change to explain the Industrial Revolution. The Industrial Revolution was a sudden large improvement in technology, which resulted in significant increases in human wealth and life…
Will a large economy be stable? Building on Robert May's original argument for large ecosystems, we conjecture that evolutionary and behavioural forces conspire to drive the economy towards marginal stability. We study networks of firms in…
The emergence of labor division in multi-agent system is analyzed by the method of statistical physics. Considering a system consists of N homogeneous agents. Their behaviors are determined by the returns from their production. Using the…
Several tiers of social organization with varying economic and social disparities have been observed. However, a quantitative characterization of the types and the causal mechanisms for the transitions have hardly been explained. While…
We describe a new complex system model of an evolving production economy. This model is the simplest we can envisage which incorporates the new observation that the rate of an economic production process depends only on the minimum of its…
This paper introduces Experiential Matrix Theory (EMT), a general theory of growth, employment, and technological change for the age of artificial intelligence (AI). EMT redefines utility as the alignment between production and an evolving,…