All posts by complexm

Crisis in Venezuela

Venezuela faces its worst economic crisis in a generation. The price of oil, which accounts for 95% of export earnings, has plunged; economists reckon annual food inflation exceeds 100%; queues outside empty shops are lengthening (and queuing before dawn has been banned).

Today the president, Nicolás Maduro, was due to explain how he intends to fix things, but he has postponed his annual address to parliament until Wednesday. A credible package would start with reform of the three-tier exchange-rate system, which would help the government pay its bills and stanch the outflow of capital. It would include higher petrol prices, the sale of state assets and spending cuts to help control debt. Phasing out price controls would ease shortages of food and medicines. But few expect Mr Maduro, whose approval rating is a mere 22%, to muster the courage for such measures.​

Economic Growth Models

Defined as

  1. An increase in real GDP occurring over some time period, or
  2. An increase in real GDP per capita occurring over some time period.

Economic growth is calculated as percentage rate of growth per quarter (3-month period) or per year.


Real GDP in US

2006: $ 12976.2 Billion

2007 $ 13254.1  Billion

US economic growth rate for 2007:

Latex formula
Ok. So that’s just a fact.   Sometimes we have a higher growth, sometimes lower. Some countries have higher growth than other country at a particular time. So why do we need a model?

Continue reading Economic Growth Models

What is complex system?

We are so used to view a system as driven by a view dominant forces that would clearly define the direction of the system as a whole that it is difficult to see the system as a self organizing entity where the direction of the system is determine by the interactions between all agents, not just by a few major driving forces cast-out by some of the agents.

Comparison between standard economics and non-standard economics is basically comparison between simple systems and complex systems. This is by no means an easy comparison. People are not really sure as to what constitutes a “complex system”. This is –of course – is rather difficult to except, because if you can define what a simple system is, then you should be able to define what a complex system is!

Continue reading What is complex system?

A Model

A Model is a different reality.  It has the observables that has the similar properties as the original reality, thus has the ability to explain and predict. Altough the components of the model are different from the reality, the behavior of the model (as a system), however, is similar to the real system if we limit ourselves to measuring a few selected variables.