Economic Development Traps in a model of Cellular Automata with endogenous rules of change

LONDON, S. , TOHMÉ F.

Pinamar, Argentina

Congreso; DYSES 2009; 2009

Asociacion Dyses, the Laboratorio de Sistemas Complejos and the Laboratorio de Sistemas Inteligentes, Facultad de Ingenieria-UBA, and the GECSI, Grupo de Estudio de la Complejidad Social en la Sociedad de la Informacion, Facultad de Ciencias Juridicas y S

Economic Development Traps in a model of Cellular Automata with endogenous rules of change Silvia London – Fernando Tohmé Universidad Nacional del Sur – Departamento de Economía CONICET Abstract Evolving economies can be formally represented in various forms. One of the possibilities we explore here is through evolutionary self-organized systems (ESO), which are basically cellular automata with endogenous rules of change. Another possibility is to consider economic evolution as the result of the nested application of rules of changes on certain structures we call economic systems. Both approaches show disadvantages: ESO systems are too general and arbitrary, while the application of rules to rules lacks in most cases an effective characterization. In order to get the best out of both worlds we define here a notion of economic ESO systems. We show that the class of these systems is equivalent to a subclass of economic systems.  The systems in this subclass can be effectively represented, with the extra bonus that the crucial role we assume knowledge plays in the mechanism of economic evolution becomes explicit. We claim that these systems are particularly fit for representing the notion of “poverty trap”. In fact, they arise in an economic ESO system that is unable to surpass a critical parameter. J.E.L. classification: B41 - C60 - O10 Keywords: evolution, self-organized criticality, effective representations, model theory.