Wednesday, March 17, 2010

Economic Model build

I have built a complex money-flow model using a process simulation software to understand macro economic phenomena but want to start out with a simpler model to explain some of the effects of macro economic decisions. This simpler model will help me frame a number of economic questions and the results we would expect from economic changes. One of the things I am trying to establish with these models is that we need to think economy in terms of exchange of goods and services and not entirely on just monetary value. Money is our creation to help with the economic exchanges but we get stuck on the money itself rather than think of the fundamental exchanges that money represents. Money is like blood, it helps with the transfer of oxygen, nutrients etc to various parts of our body but the body is more about actions, thoughts, reproduction.

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