Stability of money: Phase transitions in an Ising economy

Details Stability of money: Phase transitions in an Ising economy Stability of money: Phase transitions in an Ising economy

2001-10-10

arxiv.org/abs/cond-mat/0110201v1

Physica A 316 (2002) 453-468

Physics

Condensed Matter

Statistical Mechanics

9 pages RevTeX, 5 figures PostScript

Scientific paper

10.1016/S0378-4371(02)01218-9

The stability of money value is an important requisite for a functioning economy, yet it critically depends on the actions of participants in the market themselves. Here we model the value of money as a dynamical variable that results from trading between agents. The basic trading scenario can be recast into an Ising type spin model and is studied on the hierarchical network structure of a Cayley tree. We solve this model analytically and observe a phase transition between a one state phase, always allowing for a stable money value, and a two state phase, where an unstable (inflationary) phase occurs. The onset of inflation is discontinuous and follows a first order phase transition. The stable phase provides a parameter region where money value is robust and can be stabilized without fine tuning.

Affiliated with

Also associated with

No associations

Rating

Stability of money: Phase transitions in an Ising economy does not yet have a rating. At this time, there are no reviews or comments for this scientific paper.

If you have personal experience with Stability of money: Phase transitions in an Ising economy, we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and Stability of money: Phase transitions in an Ising economy will most certainly appreciate the feedback.

Rate now

Comments { 0 }

Profile ID: LFWR-SCP-O-712280