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Economic and Resource Bubble Research |
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Introduction
Research is being conducted into modeling economic bubbles utilizing fast entropy, as well as related questions and issues.
A key advantage of this history dynamics approach is that it allows us to identify root causes to challenges that societies are facing. That allows us to literally focus on curing the disease rather than the symptoms. Since societies are ultimately constrained and shaped by thermodynamic constraints, history dynamics is in a position to identify such root causes in a much more fundamental way than any other approach. Even better, quantifying thermodynamic "forces" upon a society allows opposing non-thermodynamic effects to be likewise quantified and compared. Although history dynamics is not in itself a "theory of everything", it allows a framework to examine everything on scales that are typically encountered in societies.
By modeling societies as combinations of bubbles and flows, we can see that many of the problems societies face are due to decreasing efficiencies, and becoming excessively dependent upon particular "bubble" resources. Recognizing this, societies can adjust efficiency to improve the timing of resource consumption, and either align their resource usage more to continuous flows, or to seek additional resource bubbles while there is still time. Further, even a society that aligns its resource usage to flows will still be subject to chaos, which can often result in bubble patterns.
Research is being conducted into modeling economic bubbles utilizing fast entropy, as well as related questions and issues.
Present areas of research include:
- Economic bubbles (time window: about 3 to 7 years)
- Time series relationships between GDP and stock index bubbles (time window: about 2 to 5 years)
- Business cycles
Modeling Resource Bubbles
Resource bubbles are a special case of economic bubble. While economies involve a "basket" of commodities, resource bubbles typically involve a single critical physical resource. While the bubble pattern of efficiency-discounted exponential growth (EDEG) is often the same for both types of bubbles, the causes and remedies somewhat differ. While an economy may involve substantial amounts of renewable resources (such as agricultural production), resource bubbles nearly always are constrained by an exhaustible resource.
Present areas of research include:
- Peak Oil
- Hewett Curves
- Semi-Renewable Resource Bubbles
- Other Resource Bubbles
- PHE Case Study #1 (pdf)—Colorado San Juans mining region Modeled Via a Maxwell-Boltzmann Distribution (1997); this is also found in PHE, 2nd Ed., above.
- PHE Case Study #2 (pdf)—Rise and Fall of Spain's Golden World, an expanded case study concerning Spain and its New World territories.