A New Algorithmic Approach to Entangled Political Economy: Insights from the Simplest Models of Complexity
Forthcoming in Advances in Austrian Economics, 2014
Wirth Institute for Austrian and Central European Studies, University of Alberta 3rd Biennial Workshop on Austrian Economics, September 15, 2012
21 Pages Posted: 25 Aug 2012 Last revised: 28 Jun 2013
Date Written: April 30, 2013
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.
Keywords: algorithmic, economics, computational, complexity, quantum, minimal model
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