Non-self-averaging and the statistical mechanics of endogenous macroeconomic fluctuations
AbstractStrong fluctuation phenomena are an endogenous feature of economic systems if they are non-self-averaging. We show that an important consequence of non-self-averaging is that current forms of economic policy can be rendered useless. We also find non-self-averaging both to exist in microeconomic models of cluster development within economies and to be consistent with observed economic power laws. These results suggest the need for straightforward identification of non-self-averaging in economic systems and to this end we present a sufficient condition for non-self-averaging in terms familiar to financial risk management.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 27 (2010)
Issue (Month): 6 (November)
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Web page: http://www.elsevier.com/locate/inca/30411
Macoeconomic models Dynamics Non-self-averaging;
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