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“The Macroeconomy as a Network of Money-Flow Transfer Functions”

Authors: Trond Andresen,
Affiliation: NTNU, Department of Engineering Cybernetics
Reference: 1998, Vol 19, No 4, pp. 207-223.

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Keywords: Macroeconomics, network, block diagram, time lag, simulation

Abstract: An introduction on A.W. Phillips' 'hydraulic' macroeconomic models is given. His (and others economists') notion that a macroeconomy may reasonably be considered to have dynamics corresponding to a first order time lag transfer function, is justified in this paper by aggregation of individual micro agents. In connection with this economic application, we derive and discuss a theorem and some rules for general networks of time lagged blocks. Numerical simulations of networks of agents are undertaken, supporting the validity of the first order time lag aggregate model. Finally, an application is presented-a model of financial accumulation and possible collapse.

PDF PDF (902 Kb)        DOI: 10.4173/mic.1998.4.3

DOI forward links to this article:
  [1] Trond Andresen (2006), doi:10.1016/j.jebo.2004.08.007
  [2] Massimiliano Zanin, David Papo, Miguel Romance, Regino Criado and Santiago Moral (2016), doi:10.1016/j.physa.2016.06.091
  [3] Wolfgang Marquardt, Jan Morbach, Andreas Wiesner and Aidong Yang (2010), doi:10.1007/978-3-642-04655-1_5
  [4] Wolfgang Marquardt, Jan Morbach, Andreas Wiesner and Aidong Yang (2010), doi:10.1007/978-3-642-04655-1_14

[1] Andresen, T. (1999). The Dynamics of Long-Range Financial Accumulation and Crisis, In Nonlinear Dynamics, Psychology, and Life Sciences, Vol. 3, No. 2.
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[3] Casella, G. Berger, R. L. (1990). Statistical Inference, California: Wadsworth, Inc.
[4] Dornbusch, R. Fischer, S. (1994). Macroeconomics, New York: McGraw-Hill, Inc.
[5] Godley, W. Cripps, F. (1983). Macroeconomics, Oxford University Press.
[6] Hotson, John H. (1994). Financing sustainable development, Économies et Sociétés, Série Monnaie et Production 9, No. 1-2, pp 359-373.
[7] Minsky, Hyman P. (1986). Stabilizing an unstable Economy, New Haven and London: Yale University Press.
[8] Phillips, A. W. (1954). Stabilisation Policy in a Closed Economy, The Economic Journal, vol. LXIV.
[9] Phillips, A. W. (1957). Stabilisation Policy and the Time-Forms of Lagged Responses, The Economic Journal, vol. LXVII.
[10] Warburton, Peter (1999). Debt and Delusion, London: Allen Lane - The Penguin Press.

  title={{The Macroeconomy as a Network of Money-Flow Transfer Functions}},
  author={Andresen, Trond},
  journal={Modeling, Identification and Control},
  publisher={Norwegian Society of Automatic Control}


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