Microeconomic Structure determines Macroeconomic Dynamics. Aoki defeats the Representative Agent

Masanao Aoki developed a new methodology for a basic problem of economics: deducing rigorously the macroeconomic dynamics as emerging from the interactions of many individual agents. This includes deduction of the fractal / intermittent fluctuations of macroeconomic quantities from the granularity of the mezo-economic collective objects (large individual wealth, highly productive geographical locations, emergent technologies, emergent economic sectors) in which the micro-economic agents self-organize. In particular, we present some theoretical predictions, which also met extensive validation from empirical data in a wide range of systems: - The fractal Levy exponent of the stock market index fluctuations equals the Pareto exponent of the investors wealth distribution. The origin of the macroeconomic dynamics is therefore found in the granularity induced by the wealth / capital of the wealthiest investors. - Economic cycles consist of a Schumpeter 'creative destruction' pattern whereby the maxima are cusp-shaped while the minima are smooth. In between the cusps, the cycle consists of the sum of 2 'crossing exponentials': one decaying and the other increasing. This unification within the same theoretical framework of short term market fluctuations and long term economic cycles offers the perspective of a genuine conceptual synthesis between micro- and macroeconomics. Joining another giant of contemporary science - Phil Anderson - Aoki emphasized the role of rare, large fluctuations in the emergence of macroeconomic phenomena out of microscopic interactions and in particular their non self-averaging, in the language of statistical physics. In this light, we present a simple stochastic multi-sector growth model.Comment: 42 pages, 6 figure

Conspiratorial beliefs observed through entropy principles

We propose a novel approach framed in terms of information theory and entropy to tackle the issue of conspiracy theories propagation. We start with the report of an event (such as 9/11 terroristic attack) represented as a series of individual strings of information denoted respectively by two-state variable Ei=+/-1, i=1,..., N. Assigning Ei value to all strings, the initial order parameter and entropy are determined. Conspiracy theorists comment on the report, focusing repeatedly on several strings Ek and changing their meaning (from -1 to +1). The reading of the event is turned fuzzy with an increased entropy value. Beyond some threshold value of entropy, chosen by simplicity to its maximum value, meaning N/2 variables with Ei=1, doubt prevails in the reading of the event and the chance is created that an alternative theory might prevail. Therefore, the evolution of the associated entropy is a way to measure the degree of penetration of a conspiracy theory. Our general framework relies on online content made voluntarily available by crowds of people, in response to some news or blog articles published by official news agencies. We apply different aggregation levels (comment, person, discussion thread) and discuss the associated patterns of entropy change.Comment: 21 page, 14 figure

How do life, economy and other complex systems escape the heat death?

The primordial confrontation underlying the existence of our universe can be conceived as the battle between entropy and complexity. The law of ever-increasing entropy (Boltzmann H-theorem) evokes an irreversible, one-directional evolution (or rather involution) going uniformly and monotonically from birth to death. Since the 19th century, this concept is one of the cornerstones and in the same time puzzles of statistical mechanics. On the other hand, there is the empirical experience where one witnesses the emergence, growth and diversification of new self-organized objects with ever-increasing complexity. When modeling them in terms of simple discrete elements one finds that the emergence of collective complex adaptive objects is a rather generic phenomenon governed by a new type of laws. These 'emergence' laws, not connected directly with the fundamental laws of the physical reality, nor acting 'in addition' to them but acting through them were called by Phil Anderson 'More is Different', 'das Maass' by Hegel etc. Even though the 'emergence laws' act through the intermediary of the fundamental laws that govern the individual elementary agents, it turns out that different systems apparently governed by very different fundamental laws: gravity, chemistry, biology, economics, social psychology, end up often with similar emergence laws and outcomes. In particular the emergence of adaptive collective objects endows the system with a granular structure which in turn causes specific macroscopic cycles of intermittent fluctuations.Comment: 42 pages, 18 figure

Stochastic Agent-Based Simulation of the Role of Labor in the Economy

We present a platform for stochastic agent-based simulation of the role of labor in the economy (SABLE). The platform facilitates heterogeneous agents: a large number of firms, workers, and banks are represented as individual agents. It allows the agents to have fixed or random reactions to the other agents and to pursue goals through decisions with bounded rationality. Its purpose is to clarify the feedback effects between the individuals as workers and consumers in a complex environment. SABLE is meant to be a quantitative precise tool to express classical, neoclassical and heterodox scenarios and to document their outcomes. In particular, questions regarding policies dealing with minimum wages, unemployment wages, hiring regulation, and the role of finance on unemployment can be studied in a new, interactive, and transparent way, inspired among others by the critical thoughts in

Dissortative From the Outside, Assortative From the Inside: Social Structure and Behavior in the Industrial Trade Network

It is generally accepted that neighboring nodes in financial networks are negatively assorted with respect to the correlation between their degrees. This feature would play an important 'damping' role in the market during downturns (periods of distress) since this connectivity pattern between firms lowers the chances of auto-amplifying (the propagation of) distress. In this paper we explore a trade-network of industrial firms where the nodes are suppliers or buyers, and the links are those invoices that the suppliers send out to their buyers and then go on to present to their bank for discounting. The network was collected by a large Italian bank in 2007, from their intermediation of the sales on credit made by their clients. The network also shows dissortative behavior as seen in other studies on financial networks. However, when looking at the credit rating of the firms, an important attribute internal to each node, we find that firms that trade with one another share overwhelming similarity. We know that much data is missing from our data set. However, we can quantify the amount of missing data using information exposure, a variable that connects social structure and behavior. This variable is a ratio of the sales invoices that a supplier presents to their bank over their total sales. Results reveal a non-trivial and robust relationship between the information exposure and credit rating of a firm, indicating the influence of the neighbors on a firm's rating. This methodology provides a new insight into how to reconstruct a network suffering from incomplete information.Comment: 10 pages, 10 figures, To appear in conference proceedings of the IEEE: HICSS-4

Estimation of the impact of electrostatic discharge on density of states in hydrogenated amorphous silicon thin-film transistors

The objective of this letter is to give an estimation of the impact of an electrostatic discharge (ESD) stress on the density of states (DOS) within the energy gap of hydrogenated amorphous silicon (a-Si:H) thin-film transistors. ESD stresses were applied by means of a transmission line model tester. The DOS in the a-Si:H was determined by Suzuki's algorithm using field-effect conductance measurements. A comparison of stressed and unstressed devices shows that there is a threshold ESD stress voltage, below which there is no damage. Above the threshold stress level, first an increase of the deep gap states is found and when stress is increased further, also in the tail states