Seminar Abstract

Friday, July 15, 2005 • 12:15 AM • Medium Conference Room

Sanjay Jain University of Delhi

A Model for Autocatalytic Economic Growth

A mathematical model for the growth of an economic network will be described. The structure of the model is inspired by models of the origin of life in which complex molecular networks self-organize via autocatalysis. The nodes of the graph are goods and a directed link from one good to another means that the former is an input in a production process of the latter. The dynamics has two time scales: on short time scales the technological graph remains fixed, and prices and quantities of goods produced by agents change with time. Over long time scales the network also changes as nodes that perform poorly (in terms of turnover or profit) are eliminated and new nodes with fresh links to existing nodes arise. The model robustly shows a pattern of increasing diversity of goods, their mutual links, and system turnover. An initial phase of linear growth caused by independent self sustaining nodes is followed by accelerated growth driven by increasing interactions and the formation of an autocatalytic set. In one version of the model the growth levels off (with fluctuations) and a phase of increasing competition sets in.