Related papers: Not-so-Cleansing Recessions
Standard micro-economics concentrate on the description of markets but is seldom interested in production. Several economists discussed the concept of a firm, as opposed to an open labour market where entrepreneurs would recrute workers on…
Consider a marketplace of AI tools, each with slightly different strengths and weaknesses. By selecting the right model for the task at hand, a user can do better than simply committing to a single model for everything. Routers operate…
We demonstrate by mathematical analysis and systematic computer simulations that redistribution can lead to sustainable growth in a society. The human capital dynamics of each agent is described by a stochastic multiplicative process which,…
This paper studies an optimal investment and consumption problem with heterogeneous consumption of basic and luxury goods, together with the choice of time for retirement. The utility for luxury goods is not necessarily a concave function.…
We use an evolutionary game model to study the interplay between corporate environmental compliance and enforcement promoted by the policy maker in a country facing a pollution trap, i.e., a scenario in which the vast majority of firms do…
We develop a general equilibrium model in which, at each instant, a short-run competitive equilibrium arises. Heterogeneity in factor allocation generates differential profit rates across sectors, prompting firms to move between them under…
We explore the nonlinear dynamics of a macroeconomic model with resource constraints. The dynamics is derived from a production function that considers capital and a generalized form of energy as inputs. Energy, the new variable, is…
Strong empirical evidence from laboratory experiments, and more recently from population surveys, shows that individuals, when evaluating their situations, pay attention to whether they experience gains or losses, with losses weighing more…
We propose a disaggregated representation of production through an agent-based fund-flow model (NGR-ADAPT) within which inefficiencies, such as factor idleness and production instability, emerge from endogenous frictions. The model…
We study a coevolutionary public goods game on a dynamic hypergraph, where an individual's payoff directly determines the number of hyperedges it can join. In the proposed mechanism, nodes adjust their participation according to the group…
We propose a combinatorial model of economic development. An economy develops by acquiring new capabilities allowing for the production of an ever greater variety of products of increasingly complex products. Taking into account that…
Competition and cooperation are inherent features of any multi-echelon supply chain. The interactions among the agents across the same echelon and that across various echelons influence the percolation of market demand across echelons. The…
COVID-19 abatement strategies have risks and uncertainties which could lead to repeating waves of infection. We show -- as proof of concept grounded on rigorous mathematical evidence -- that periodic, high-frequency alternation of into, and…
A common problem when forecasting rare events, such as recessions, is limited data availability. Recent advancements in deep learning and generative adversarial networks (GANs) make it possible to produce high-fidelity synthetic data in…
Dissipation is commonly regarded as an obstacle to quantum control, as it induces decoherence and irreversibility. Here we demonstrate that dissipation can instead be exploited as a resource to reshape the dynamics of interacting quantum…
We study how idiosyncratic firm-level shocks generate aggregate volatility and tail risk when they propagate through a production network under overlapping adjustment: new productivity draws arrive before the economy reaches the static…
Why do capitalist economies recurrently generate crises whose severity is disproportionate to the size of the triggering shock? This paper proposes a structural answer grounded in the evolutionary geometry of production networks. As…
Conventional economic analysis of stringent climate change mitigation policy generally concludes various levels of economic slowdown as a result of substantial spending on low carbon technology. Equilibrium economics however could not…
We investigate machine learning models for stock return prediction in non-stationary environments, revealing a fundamental nonstationarity-complexity tradeoff: complex models reduce misspecification error but require longer training windows…
Time-varying electricity pricing better reflects the varying cost of electricity compared to flat-rate pricing. Variations between peak and off-peak costs are increasing due to weather variation, renewable intermittency, and increasing…