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Non-equilibrium Economics

Author(s): Katalin MartinĂ¡s

Journal: Interdisciplinary Description of Complex Systems
ISSN 1334-4684

Volume: 4;
Issue: 2;
Start page: 63;
Date: 2007;
Original page

Keywords: equilibrium hypothesis | non-equilibrium economics | avoid the avoidable losses

A microeconomic, agent based framework to dynamic economics is formulated in a materialist approach. An axiomatic foundation of a non-equilibrium microeconomics is outlined. Economic activity is modelled as transformation and transport of commodities (materials) owned by the agents. Rate of transformations (production intensity), and the rate of transport (trade) are defined by the agents. Economic decision rules are derived from the observed economic behaviour. The non-linear equations are solved numerically for a model economy. Numerical solutions for simple model economies suggest that the some of the results of general equilibrium economics are consequences only of the equilibrium hypothesis. We show that perfect competition of selfish agents does not guarantee the stability of economic equilibrium, but cooperativity is needed, too.
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