Journal of Microbiome Research and Health Applications
Dynamic Equations of the Economy: How to Trade Market and Make Money in "N" Dimensions
Abstract
Timoteo Briet Blanes
Econophysics, supported by mathematics, has proven to be a promising field for studying complex economic systems. However, the absence of a general theory limits its applicability. This work proposes a novel framework based on fluid dynamics and artificial intelligence to jointly model and predict dependent economic events. After the model “WAVES”, the model termed “ABE” (Acceleration Balance Equation), defines a space with a potential field, where geodesics represent the trajectories of economic events (the “GT” Geodesic Trajectories model) as the metric is defined by the Hamiltonian action. Artificial intelligence is utilized to optimize the model and enhance its predictive accuracy based on existing projections, working with the model described as a neural network. Comprehensive tests are conducted to validate the proposed approach, both for individual events and sets of events. The results demonstrate the model’s capability to capture underlying dynamics and predict future behaviour with minimal uncertainty. This method holds significant potential for real-time applications, as well as short, medium, and long-term analyses. By minimizing or removing human intervention and leveraging the laws of physics, particularly through transport and diffusion phenomena, the proposed approach offers a robust, targeted solution for the joint modeling and forecasting of economic events, built on the foundation of the so-called natural dynamics of the economy. Consequently, a range of useful tools are defined, providing economists with means to regulate the economy and intervene appropriately at critical moments, even creating new structures. These tools enable decision-makers to design and implement effective public policies that promote economic and social welfare, as well as optimal equilibrium. The 2024 Nobel laureate in Economics proposes the proper identification of institutions and the economic structure necessary to achieve sustainable growth [1]. This growth also requires effective cooperation among individuals, as well as the preservation of both individual and conditional freedom. This article offers a key tool to accomplish that goal.