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A New Algorithmic Approach to Entangled Political Economy: Insights from the Simplest Models of Complexity

In: Entangled Political Economy

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  • Philip Z. Maymin

Abstract

Economic models based on simple rules can result in complex and unpredictable deterministic dynamics with emergent features similar to those of actual economies. I present several such models ranging from cellular automaton and register machines to quantum computation. The additional benefit of such models is displayed by extending them to model political entanglement to determine the impact of allowing majority redistributive voting. In general, the insights obtained from simulating the computations of simple rules can serve as an additional way to study economics, complementing equilibrium, literary, experimental, and empirical approaches. I culminate by presenting a minimal model of economic complexity that generates complex economic growth and diminishing poverty without any parameter fitting, and which, when modified to incorporate political entanglement, generates volatile stagnation and greater poverty.

Suggested Citation

  • Philip Z. Maymin, 2014. "A New Algorithmic Approach to Entangled Political Economy: Insights from the Simplest Models of Complexity," Advances in Austrian Economics, in: Entangled Political Economy, volume 18, pages 213-236, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:aaeczz:s1529-213420140000018010
    DOI: 10.1108/S1529-213420140000018010
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    References listed on IDEAS

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    1. Philip Z. Maymin, 2011. "The minimal model of financial complexity," Quantitative Finance, Taylor & Francis Journals, vol. 11(9), pages 1371-1378, February.
    2. Richard Holt & J. Barkley Rosser & David Colander, 2011. "The Complexity Era in Economics," Review of Political Economy, Taylor & Francis Journals, vol. 23(3), pages 357-369.
    3. Richard E. Wagner, 2007. "Fiscal Sociology and the Theory of Public Finance," Books, Edward Elgar Publishing, number 12713, March.
    4. Rosser, J. Barkley, 2012. "Emergence and complexity in Austrian economics," Journal of Economic Behavior & Organization, Elsevier, vol. 81(1), pages 122-128.
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    More about this item

    Keywords

    Algorithms; economy; complexity; C62; C63; D58; E17; G00;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • G00 - Financial Economics - - General - - - General

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