Boom and bust in continuous time evolving economic model

DOI10.1140/EPJB/E2009-00243-YMaRDI QIDQ977796zbMATH OpenOpenAlexWikidataFDO

Authors J. Martínez

Publication date 23 June 2010

Published in The European Physical Journal B. Condensed Matter and Complex Systems (Search for Journal in Brave)

Full work available at URL https://arxiv.org/abs/0801.3973

Mathematics Subject Classification ID

Applications of statistical and quantum mechanics to economics (econophysics) (91B80)

Abstract: We show that a simple model of a spatially resolved evolving economic system, which has a steady state under simultaneous updating, shows stable oscillations in price when updated asynchronously. The oscillations arise from a gradual decline of the mean price due to competition among sellers competing for the same resource. This lowers profitability and hence population but is followed by a sharp rise as speculative sellers invade the large un-inhabited areas. This cycle then begins again.

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