mechanomics

Macroeconomics is represented as a hard science like physics and, specifically, classical mechanics. Due to this similarity we have called our concept "mechanomics" highlighting its mechanistic entity. There exist statistically reliable deterministic links between measured macroeconomic variables. In the order of causality, the overall population and its age structure drives the evolution of real GDP which, in turn, determines the rate of participation in workforce. The level of labour force unambiguously defines the rate of price inflation and unemployment. The age structure also controls the S&P 500 returns. Statistically, the goodness-of-fit between measured and predicted macroeconomic time series is at the level of 0.9, with the residuals likely related to measurement errors. Tests for cointegration confirm the presence of long-term equilibrium relations. We have extended the sets of econometric tools by the method of boundary elements well-known in physics. As a bonus to the prolific concept of mechanomics, we have modelled real GDP per capita during the transition from socialism to capitalism combining two physical processes: radioactive decay and saturation.

1/27/12

Two more graphs on GDP in the USA

Two more graphs on real GDP in the USA. In the forth quarter of 2011, the level of real GDP was higher ($13,422 .4 billion) than that in the fourth quarter of 2007 ($13,326 billion) as Figure 1 shows. Figure 2 demonstrates that  the increasing population did not allow real GDP per capita t reach the level of 2007: $42,727 vs. $43,791. In seems to be the task for 2012 to 2014 if no recession will occur.  

Figure 1. Real GDP

Figure 2. Real GDP per capita

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