Suggestion for thesis.

To homepage May 9, 1998

Processes in macro economic systems shall be simulated with the use of methods that are known from control systems theory and design of electrical circuits. The task consists of model building, simulation and analysis of the results. The equation parameters are derived from historical data (economic statistics).

The model is designed as a number of economic sectors which are interconnected by flows of payments and resources. A simple model may comprise households, a public sector, private enterprises and a financial sector. The model has a number of inputs: daily working hours, payment rates, taxes, export volumes etc. The output from the model may be unemployment rates, gross domestic product and income distribution.

I have developed a general method for designing models with varying amount of details. A number of models were made using the Excel-calculus program. The models can be further developed according to your own interests. A first model may be static. It can be turned into a dynamic model by adding savings, investments and borrowing.

The final result is a report and a simulation program, preferably for a personal computer (PC). You may choose your own tools, Excel, Visual basic, C++, Matlab etc. It is advantageous if the program can be run as a application of its own or by the use of common software (Office).

You should have a general interest in society. Knowledge of economy is not absolutely necessary. If you did not study economy before, you will need to read one or two books of basic macro economics. On the other side, if you are not an engineer, you will be helped with the mathematical part.

Lars Olert
Master of Science, applied physics
Working with aircraft testing at SAAB in Linköping, Sweden.

Tel. home x46 - 13- 15 10 08, office x46 - 13 - 18 41 68. E-mail.
Internet home page http://www.ecf-theory.se.

PS.

There are a number of political and economic issues to be studied:

• What measures shall be taken in order to defeat unemployment? This issue is part of all problems posed below.
• The mechanisms of growth. How does growth occur?
• Sustainable economy, scarceness of resources.
• Economic fluctuations. The mechanisms behind. Investments.
• Relations between exchange rates and interest rate. Flexible exchange rate, fixed exchange rate or a common currency?
• Stock market, swings and crashes.
• Old age pension systems. Long run stability?
• The influence of daily working hours.
• Wages, prices and inflation.
• Environmental tax reform, less taxes on labor, more taxes on scarce resources.
• Competition between companies.
• Tax-defaulting, tax ratio and solidarity towards the taxation system.
• The strategy of private persons and enterprises, impact on the community.
• Locking effects of regulations that turn savings in one sector into costs for another sector.

Some problems are more difficult than others. I believe that all can be treated in a simulation. The difficult part is to find the statistics that support the model. All issues will show the impact on employment, income distribution and production volumes in various sectors from the primary factor that is studied.

DS.