Physical Modeling of Economic Systems - страница 5

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is considered here as a unique one for market economic systems.

Fig. 3.1. Coordinate system of the one-dimensional price space.

Fig. 3.2. Coordinate system of the two-dimensional price space.

The next step in developing a physical model after selecting a space is selection of a function with the help of which we will try to describe the dynamics of an economy, i.e. movement of buyers and sellers in the price space. Trajectories in coordinate physical space х(t) (classical mechanics), wave functions

or distributions of probabilities

(quantum mechanics), Green’s functions G and S-matrices (in quantum physics), etc. are used as such functions in physics. We start with an attempt to develop the model using trajectories in the price space p(t) by analogy with the use of trajectories х(t) of pointlike bodies used in classical mechanics. Such model will in short be called below as a classical model or simply classical economy.

4. Classical economy

According to the above-stated plan of actions in this chapter we could confine ourselves to just writing equations of motion analogous to those obtained in classical mechanics. However, we consider it useful to derive a full row of equations and to make additional comments on our actions. First of all, as we have indicated before, we suppose that according to our approach to classical modeling of economic systems every economic agent, homo negotians

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