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Buying Power with Nonrenewable Autocatalytic Growth

Description:

This macroeconomic system is examined by letting autocatalytic growth generate economic assets(Q) with 3 pathways, one using fuels and minerals and two based only on renewable resources. Renewable(J) and nonrenewable(F) sources drive production(P) of assets(Q).

Examples:

This is a model for any country which is dependent on its own fuels and renewable resources and not very dependent on imports and exports. The Ex-Soviet Union fits this model. Even though the USA has more trade, this can also represent their economy.

 Diagram

Variables:

PR = prices ( production per dollar )
P = productivity
F = fuel
Q = economic assets

Equations:

PR = K*M/P
DF = - K2*R*F*Q
P = K3*R*F*Q + K4*R*Q +PW
DQ = P - K5*Q
R = J/(1 + K1*F*Q + K0*Q + PW)

Simulation:

The graph shows the changes of PR(red), Q(green), F(magenta) and P(blue) over a time period.
Source code: Buypower.java

"What if" Experiments:

  • What happens to prices if the system starts with more fuel? Make F=150.
  • If the system converts fuels more efficiently, how will that affect assets and prices?
  • How does the system react if it finds a way to use its renewable energies more efficiently? Increase k4.