Microscopic Study Reveals the Singular Origins of Growth

TL;DR

This paper uses empirical data from Poland's post-liberalization period to validate an agent-based model of growth driven by rare singular events, highlighting the role of growth centers and diffusion in economic resilience.

Contribution

It introduces an agent-based model validated by real-world data, emphasizing the importance of rare events and growth centers in economic development.

Findings

Growth driven by few singular 'growth centers'

Rapid initial development followed by diffusion

Empirical validation of the model with Polish data

Abstract

P.W. Anderson proposed the concept of complexity in order to describe the emergence and growth of macroscopic collective patterns out of the simple interactions of many microscopic agents. In the physical sciences this paradigm was implemented systematically and confirmed repeatedly by successful confrontation with reality. In the social sciences however, the possibilities to stage experiments to validate it are limited. During the 90's a series of dramatic political and economic events have provided the opportunity to do so. We exploit the resulting empirical evidence to validate a simple agent based alternative to the classical logistic dynamics. The post-liberalization empirical data from Poland confirm the theoretical prediction that the dynamics is dominated by singular rare events which insure the resilience and adaptability of the system. We have shown that growth is led by few singular "growth centers" (Figure 1), that initially developed at a tremendous rate (Figure3), followed by a diffusion process to the rest of the country and leading to a positive growth rate uniform across the counties. In addition to the interdisciplinary unifying potential of our generic formal approach, the present work reveals the strong causal ties between the "softer" social conditions and their "hard" economic consequences.