Related papers: Consumption and capital growth
A standard growth model is modified in a straightforward way to incorporate what Keynes (1936) suggests in the "essence" of his general theory. The theoretical essence is the idea that exogenous changes in investment cause changes in…
This article concerns the optimal choice of flat taxes on labor and capital income, and on consumption, in a tractable economic model in which agents are subject to idiosyncratic investment risk. We identify the tax rates which maximize…
We show that evolution in a population of adaptive agents, repeatedly competing for a limited resource, can come to an abrupt halt. This transition from evolutionary to non-evolutionary behavior arises as the global resource level is…
Maximizing robustness and minimizing cost are common objectives in the design of infrastructure networks. However, most infrastructure networks evolve and operate in a highly decentralized fashion, which may significantly impact the…
I demonstrate that with the market return determined by the equilibrium returns of the CAPM, expected returns of an asset are affected by the risks of all assets jointly. Another implication is that the range of feasible market returns will…
Real-world growth processes and scalings have been broadly categorized into three growth regimes with distinctly different properties and driving forces. The first two are characterized by a positive and constant feedback between growth and…
Cluster growth in a coagulating system of active particles (such as microswimmers in a solvent) is studied by theory and simulation. In contrast to passive systems, the net velocity of a cluster can have various scalings dependent on the…
Connectivity - or the lack thereof - is crucial for the function of many man-made systems, from financial and economic networks over epidemic spreading in social networks to technical infrastructure. Often, connections are deliberately…
A simplified model for the growth of a population is studied in which random effects arise because reproducing individuals have a certain probability of surviving until the next breeding season and hence contributing to the next generation.…
We formulate an infinite-horizon optimal investment and consumption problem, in which an individual forms a habit based on the exponentially weighted average of her past consumption rate, and in which she invests in a Black-Scholes market.…
A portfolio of different stocks and a risk-less security whose composition is dynamically maintained stable by trading shares at any time step leads to a growth of the capital with a nonrandom rate. This is the key for the theory of…
A new model that combines economic growth rate fluctuations at the microscopic and macroscopic level is presented. At the microscopic level, firms are growing at different rates while also being exposed to idiosyncratic shocks at the firm…
Great cities connect people; failed cities isolate people. Despite the fundamental importance of physical, face-to-face social-ties in the functioning of cities, these connectivity networks are not explicitly observed in their entirety.…
We propose in this work a kinetic wealth-exchange model of economic growth by introducing saving as a non consumed fraction of production. In this new model, which starts also from microeconomic arguments, it is found that economic…
In this paper we characterise the propensity of big capital investments to systematically deliver poor outcomes as "fragility," a notion suggested by Nassim Taleb. A thing or system that is easily harmed by randomness is fragile. We argue…
Standard economic theory uses mathematics as its main means of understanding, and this brings clarity of reasoning and logical power. But there is a drawback: algebraic mathematics restricts economic modeling to what can be expressed only…
The economic structure of basic science is currently socialist, funded by the public at large through taxes for the benefit of the public at large. This socialist system should be augmented by a capitalist system, in which basic science is…
This paper presents a general solution for a recent model by Keen for endogenous money creation. The solution provides an analytic framework that explains all significant dynamical features of Keen's model and their parametric dependence,…
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,…
We investigate the relation between economic growth and equality in a modified version of the agent-based asset exchange model (AEM). The modified model is a driven system that for a range of parameter space is effectively ergodic in the…