Multi-scale Economic Dynamics: The Micro–Macro Wealth Dynamics and the Two-Level Imbalances of the Euro Crisis

Hanchao Yang, Chenjie Shao, Khaldoun Khashanah

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

We introduce a system of ordinary differential equations to model the micro–macro wealth dynamics of interactions between international enterprise competitiveness and the macroeconomic growth as an open system. The novelty of the approach is to postulate dynamic interaction between domestic and foreign companies and link this interaction to the GDP growth. The objective is to construct a micro–macro wealth dynamic model. By analyzing the market share data of the retail industry of 13 largest Eurozone countries as a system, our model suggests that the predator–prey relation exists. Under certain regimes, it is shown that foreign companies have a negative contribution to the GDP growth. Such dynamics reveals two levels of imbalances: company competitiveness and national economic growth.

Original languageEnglish
Pages (from-to)587-616
Number of pages30
JournalComputational Economics
Volume53
Issue number2
DOIs
StatePublished - 15 Feb 2019

Keywords

  • International competitiveness
  • Micro–macro wealth dynamics
  • ODE system
  • Predator–prey relation
  • Two-level imbalance

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