Abhijit Kar Gupta. Punctuated Equilibrium and Power Law in Economic Dynamics
Social Sciences / Economics / Microeconomics
Submitted on: Mar 30, 2012, 19:35:58
Description: An interesting toy model has recently been proposed on Schumpeterian economic dynamics by Thurner et al. [1] following the idea of economist Joseph Schumpeter [2]. Punctuated equilibrium dynamics is shown to emerge from this model and some detail analyses of the time series indicate SOC kind of behaviours. The focus in the present work is to toss the idea whether the dynamics can really be like a self organized critical (SOC) type. This study indicates that it is necessary to iccorporate the concepts of 'fitness' and 'selection' in such a model in the line of the biological evolutionary model by Bak and Sneppen [7] in order to obtain power law and thus SOC behaviour.