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In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an overall general equilibrium. General equilibrium theory contrasts with the theory of partial ...
Complexity economics is the application of complexity science to the problems of economics. It relaxes several common assumptions in economics, including general equilibrium theory. While it does not reject the existence of an equilibrium, it sees such equilibria as "a special case of nonequilibrium", and as an emergent property resulting from ...
Economics. The idea of convergence in economics (also sometimes known as the catch-up effect) is the hypothesis that poorer economies ' per capita incomes will tend to grow at faster rates than richer economies. In the Solow-Swan growth model, economic growth is driven by the accumulation of physical capital until this optimum level of capital ...
The impossible trinity (also known as the impossible trilemma, the monetary trilemma or the Unholy Trinity) is a concept in international economics and international political economy which states that it is impossible to have all three of the following at the same time: a fixed foreign exchange rate. free capital movement (absence of capital ...
The O-ring theory of economic development is a model of economic development put forward by Michael Kremer in 1993, [1] which proposes that tasks of production must be executed proficiently together in order for any of them to be of high value. The key feature of this model is positive assortative matching, whereby people with similar skill ...
t. e. An economic model is a theoretical construct representing economic processes by a set of variables and a set of logical and/or quantitative relationships between them. The economic model is a simplified, often mathematical, framework designed to illustrate complex processes. Frequently, economic models posit structural parameters. [1]
Open system (systems theory) An open system is a system that has external interactions. Such interactions can take the form of information, energy, or material transfers into or out of the system boundary, depending on the discipline which defines the concept. An open system is contrasted with the concept of an isolated system which exchanges ...
In physics, a gauge theory is a type of field theory in which the Lagrangian, and hence the dynamics of the system itself, do not change under local transformations according to certain smooth families of operations ( Lie groups ). Formally, the Lagrangian is invariant . The term gauge refers to any specific mathematical formalism to regulate ...