Modeling Economic Systems

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Modeling Economic Systems

• Aaron Salls
• Pd. 3
• January 26, 2006

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Background

• Adam Smiths Capitalism vs. Karl Marxs Communism
• Regulation vs. natural forces of supply and
  demand
• Real-life scenarios indicate that regulation is
  bad, namely, the regulation that led to the
  stagflation of the 1970s
• Deregulation of airlines allowed supply and
  demand to command the market, allowing for
  greater profit and distribution of wealth

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Procedure

• Built upon Bank Reserves model
• Removed individual interaction
• Assigned all agents as employees of one of three
  companies, all vying for the business of the
  entire population
• Agents paycheck dependent on the success of the
  company
• Investments into the company redistribute the
  wealth

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Figure 1. Screen Capture of the Model
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Problem / Analysis

• Currently, model is more socialistic in nature
  (no return on investment (ROI), no
  CEOs/entrepreneurs)
• The model is very, very simplistic. There is room
  to expand to include variable population,
  government regulation, taxes, etc.

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Figure 2. Fairly normal distribution of wealth in
model
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Figure 3. Money Increase w/ Interest