Dynamic Model of Economic Agents Including Interaction and Delay Effects

Abstract: The dynamic model of economic growth of several agents is presented. This is a system of non-linear differential-difference equations. The model takes into account the interaction of economic agents and the delay effect. Some simple analytic particular solutions are shown. These analytical solutions allow some clear economic interpretation. The comparative scenario quantitative calculations are given. The calculations are presented for time period of a decade for the typical global development rate of 3% per year. There are two main scenarios. The first scenario of cooperative or isolated agent development is considered. There is the scenario of the agent development due to use the other partners. The consequence of isolation is the backlog of 60% per decade. The second scenario is the time delay-lead effect to use the achievements of other agents. A lead of one - two years is considered. In this case, ceteris paribus, the dynamic growth of the agent is 1.5 times ahead of the others. More effective growth occurs with the faster and advance reaction rate to partner achievements. In this case there is the effect of the multiplicative accumulation of advantage. This scenario can be interpreted as the illustration of the accelerated economic growth of post-war Japan.

Keywords: economic dynamic model, economic interaction and cooperation, delay, differential-difference equations