Featured Research

from universities, journals, and other organizations

Averting worse economic collapses

Date:
June 25, 2013
Source:
Springer
Summary:
By managing macro-economic parameters, scientists believe that -- unlike previously thought -- it is possible to steer an economy around irreversible changes in its complex dynamics and avert potential economic disasters.

By managing macro-economic parameters, scientists believe that -unlike previously thought- it is possible to steer an economy around irreversible changes in its complex dynamics and avert potential economic disasters. These findings, about to be published in The European Physical Journal B, stem from the theoretical work of Michael Harrι and colleagues at the Complex Systems Group at the University of Sydney, Australia.

Related Articles


Physicists have a long experience of using statistical mechanics to study equilibrium points and small fluctuations in large numbers of interacting particles under varying pressure and temperature conditions. By applying statistical-mechanics methods to economic game theory, it is possible to describe the strategic interactions between, say, businesses which are influenced by their own incentives as well as the incentives of third parties.

By changing a macro-economic parameter like tax rates, previous research has shown the system will usually move away a little from where it had settled, but not much. Their new results show that such optimisation can produce a tipping point where a change in the tax regime, for example, will cause the whole economy to suddenly collapse.Harrι and colleagues found that it is possible to find a steady state in the specific scenario where the contributions each business makes to the whole economy are maximised in terms of financial return. And even if an economy is drifting inexorably towards a tipping point, they showed that small perturbations of the system parameters can move an economy around a tipping point, thus averting it.

The ability to exert control on economies depends on having sufficient control of the system parameters -potentially addressed by empirical research, and knowing where the economy is relative to these tipping points- provided by recent measuring techniques.


Story Source:

The above story is based on materials provided by Springer. Note: Materials may be edited for content and length.


Journal Reference:

  1. Michael S. Harrι, Simon R. Atkinson, Liaquat Hossain. Simple nonlinear systems and navigating catastrophes. The European Physical Journal B, 2013; 86 (6) DOI: 10.1140/epjb/e2013-31064-x

Cite This Page:

Springer. "Averting worse economic collapses." ScienceDaily. ScienceDaily, 25 June 2013. <www.sciencedaily.com/releases/2013/06/130625121237.htm>.
Springer. (2013, June 25). Averting worse economic collapses. ScienceDaily. Retrieved January 29, 2015 from www.sciencedaily.com/releases/2013/06/130625121237.htm
Springer. "Averting worse economic collapses." ScienceDaily. www.sciencedaily.com/releases/2013/06/130625121237.htm (accessed January 29, 2015).

Share This


More From ScienceDaily



More Science & Society News

Thursday, January 29, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Oxfam Calls for Massive Aid for Ebola-Hit West Africa

Oxfam Calls for Massive Aid for Ebola-Hit West Africa

AFP (Jan. 29, 2015) — Oxfam International has called for a multi-million dollar post-Ebola "Marshall Plan", with financial support given by wealthy countries, to help Guinea, Sierra Leone and Liberia to recover. Duration: 01:10 Video provided by AFP
Powered by NewsLook.com
Tesla 'Insane Mode' Gives Unsuspecting Passengers the Ride of Their Life

Tesla 'Insane Mode' Gives Unsuspecting Passengers the Ride of Their Life

RightThisMinute (Jan. 29, 2015) — If your car has an "Insane Mode" then you know it&apos;s fast. Well, these unsuspecting passengers were in for one insane ride when they hit the button. Tesla cars are awesome. Video provided by RightThisMinute
Powered by NewsLook.com
Now Bill Gates Is 'Concerned' About Artificial Intelligence

Now Bill Gates Is 'Concerned' About Artificial Intelligence

Newsy (Jan. 29, 2015) — Bill Gates joins the list of tech moguls scared of super-intelligent machines. He says more people should be concerned, but why? Video provided by Newsy
Powered by NewsLook.com
Are We Winning The Fight Against Ebola?

Are We Winning The Fight Against Ebola?

Newsy (Jan. 29, 2015) — The World Health Organization announced the fight against Ebola has entered its second phase as the number of cases per week has steadily dropped. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
 
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:  

Breaking News:

Strange & Offbeat Stories

 

Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:  

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile iPhone Android Web
Follow Facebook Twitter Google+
Subscribe RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins