TITLE:
4-D Modeling of a Sustainable Economy: Integrating Economic, Environmental, Population, and Monetary Models
AUTHORS:
Frederick Betz
KEYWORDS:
Quantitative Economics, Sustainable Economy, Environmental Economics, Economic Models, Financial Models
JOURNAL NAME:
Theoretical Economics Letters,
Vol.9 No.6,
August
15,
2019
ABSTRACT: Leontief’s Input-Output Analysis equation has long
been used around the world and especially in China to calculate production and
consumption balances. This research shows how to connect environmental and
financial balances to production balances in an economic region by generalizing
the Leontief’s equations from vector form to tensor form. This is important for
creating economic and environmental policies aimed at sustainable economies. It
provides a general modeling approach which can quantitatively connect economic
processes with biological and physical processes of the environment. If
economic processes cannot be measured as to their real physical/biological
impacts, one does not know whether or not such economic processes are
sustainable in nature. The tensor generalization also enables the depiction of
both economic processes as production and finance. The use of tensor
mathematics for input-output models of both economy and its environment
provides a data architecture to create simulation models of the environmental
impact of an economy.