Our first stop along the way is at the fascinating web site of the Bionomics Institute, at http://www.bionomics.org. Visit this site, and you'll quickly realize that economic simulation is not the dry, bland sort of proposition you may have at first imagined. In fact, there seems to be a lot of room for very lively debate just on the nature of an economy in general.
According to the folks at the Bionomics Institute, an economy has traditionally been thought of as a machine that behaves predictably according to mathematical equations and the laws of physics. Based on this line of thinking, forecasts and attempts to shape markets have been made based on interest rate fluctuations, stock prices, etc. But there may, indeed, be a different, possibly more realistic means of modeling an economy.
In our recent discussions of environmental simulation, we discovered that ecosystems consist of some environment, all of the inhabitants of that environment, their interactions with each other and with the environment itself and possible effects from outside sources, such as the sun, visitors or windblown objects. It is not too hard to imagine an economy fitting into this model. In this case, the environment would include such factors a unemployment rates, the monetary system and government protocol, while players, or inhabitants, would include workers, banks, businesses and the government, again.
Next week, we'll look at Bionomics' mission and setup a little more closely, and then we'll see what kinds of simulation techniques are being employed in economic modeling. By Christmas, maybe we'll have all of our financial problems figured out...or maybe not!
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