Related papers: The Theory of Economic Complexity
In this paper, we analyze the complexity of functional programs written in the interaction-net computation model, an asynchronous, parallel and confluent model that generalizes linear-logic proof nets. Employing user-defined sized and…
We explore a definition of complexity based on logic functions, which are widely used as compact descriptions of rules in diverse fields of contemporary science. Detailed numerical analysis shows that (i) logic complexity is effective in…
Mathematical models are increasingly used in both academia and the pharmaceutical industry to understand how phenotypes emerge from systems of molecular interactions. However, their current construction as monolithic sets of equations…
Probabilistic independence can dramatically simplify the task of eliciting, representing, and computing with probabilities in large domains. A key technique in achieving these benefits is the idea of graphical modeling. We survey existing…
The likelihood function plays a pivotal role in statistical inference; it is adaptable to a wide range of models and the resultant estimators are known to have good properties. However, these results hinge on correct specification of the…
Income- and price-elasticity of demand quantify the responsiveness of markets to changes in income, and in prices, respectively. Under the assumptions of utility maximization and preference-independence (additive preferences), mathematical…
We model sectoral production by cascading binary compounding processes. The sequence of processes is discovered in a self-similar hierarchical structure stylized in the economy-wide networks of production. Nested substitution elasticities…
Although computational complexity is a fundamental aspect of program behavior, it is often at odds with common type theoretic principles such as function extensionality, which identifies all functions with the same $\textit{input-output}$…
The theory of thermal macroeconomics (TM) analyses economic phenomena within the mathematical framework of classical thermodynamics, using a set of axioms that apply to the purely macroscopic aspects of an economy [CM]. The theory shows…
Economy, and consequently trade, is a fundamental part of human social organization which, until now, has not been studied within the network modelling framework. Networks are mathematical tools used in the modelling of a wide variety of…
This paper proposes a framework for categorizing economic policies in a form of a tree taxonomy. The purpose of this approach is to construct an exhaustive and standardized list of actions that a governing authority has access to and can…
This article presents a general solution to the problem of computational complexity. First, it gives a historical introduction to the problem since the revival of the foundational problems of mathematics at the end of the 19th century.…
This work applies Matrix Completion (MC) -- a class of machine-learning methods commonly used in the context of recommendation systems -- to analyse economic complexity. MC is applied to reconstruct the Revealed Comparative Advantage (RCA)…
To analyze the evolutionary emergence of structural complexity in physical processes we introduce a general, but tractable, model of objects that interact to produce new objects. Since the objects--\emph{$epsilon$-machines}--have well…
We study a method for calculating the utility function from a candidate of a demand function that is not differentiable, but is locally Lipschitz. Using this method, we obtain two new necessary and sufficient conditions for a candidate of a…
We develop a complexity measure for large-scale economic systems based on Shannon's concept of entropy. By adopting Leontief's perspective of the production process as a circular flow, we formulate the process as a Markov chain. Then we…
We show that for a certain class of dynamics at the nodes the response of a network of any topology to arbitrary inputs is defined in a simple way by its response to a monotone input. The nodes may have either a discrete or continuous set…
Accuracy of economic theories and efficiency of economic policy strictly depend on the choice of the economic variables and processes mostly liable for description of economic reality. That states the general problem of assessment of any…
Generative models can be trained to emulate complex empirical data, but are they useful to make predictions in the context of previously unobserved environments? An intuitive idea to promote such extrapolation capabilities is to have the…
Any function can be constructed using a hierarchy of simpler functions through compositions. Such a hierarchy can be characterized by a binary rooted tree. Each node of this tree is associated with a function which takes as inputs two…