A (reactive) lattice-gas approach to economic cycles

TL;DR

This paper introduces a microscopic lattice-gas model for macroeconomic cycles, demonstrating how local interactions and a scalar business plan parameter can lead to phase transitions, bifurcations, and chaotic dynamics in economic systems.

Contribution

It develops a novel reactive lattice-gas framework for macroeconomic modeling, linking microscopic entity interactions to macroeconomic phenomena like cycles and phase transitions.

Findings

The model exhibits phase transitions depending on selection pressure.

Economic cycles and chaotic behavior emerge from the model dynamics.

The scalar business plan parameter controls bifurcations and system stability.

Abstract

A microscopic approach to macroeconomic features is intended. A model for macroeconomic behavior under heterogeneous spatial economic conditions is reviewed. A birth-death lattice gas model taking into account the influence of an economic environment on the fitness and concentration evolution of economic entities is numerically and analytically examined. The reaction-diffusion model can be also mapped onto a high order logistic map. The role of the selection pressure along various dynamics with entity diffusion on a square symmetry lattice has been studied by Monte-Carlo simulation. The model leads to a sort of phase transition for the fitness gap as a function of the selection pressure and to cycles. The control parameter is a (scalar) ''business plan''. The business plan(s) allows for spin-offs or merging and enterprise survival evolution law(s), whence bifurcations, cycles and chaotic behavior.