Abstract:
We have simulated the model of Employment, Production and Consumption (EPC)
using Monte Carlo. The EPC model is an agent-based model that mimics very
basic rules of industrial economy. From perspective of physics, the nature
of the interactions in the EPC model represents multi-agent interactions where
the relations among agents follow the key laws for circulation of capital
and money. Monte Carlo simulations of the stochastic model reveal phase
transition in the model economy. The two phases are the phase with full unemployment
and the phase with nearly full employment. The economy switches between these
two states suddenly as a reaction to a slight variation in the exogenous
parameter, thus the system exhibits strong non-linear behavior as a response
to the change of the exogenous parameters.