SOCIAL SCIENCES
In the next papers we
a) explore the application of statistics and stochastic
differential calculi , in macroeconomics, microeconomics,
insurance and finance.
b) attempt a more elegant and concise representation of the formulae of actuarial
mathematics (insurance) through standard formulations of stochastic processes.
And through this a rational decision to the problem of which investments in
pensions are better.
c) It is attempted to bridge some how the gap between academic techniques
of statistics and forecasting with empirical techniques of financial
technical analysis in capital markets.
d) we give some applications of portfolio theory and stochastic
dynamics, worked out with data of the Greek capital markets.
e) we give estimations of liquidity that protect the investors in
futures (derivatives) from the risk of bankruptcy.
5) The impact of the
convergence of the Greek economy to EMI in the Stockmarket: Bayes, nested
estimation of the stock trends
By
Dr.C.Kyritsis .Archives of Economic History
v. X, no12 ,(1999) pp 4152.
(The same
paper as word document)
Comments and Interpretation:
The paper discusses the consequences of the perspective
of participation of Greece in the European Monetary Unification in the Greek
Society and the Athens Stock Market. It makes use of a discrete time (timeseries) simulation model for the Athens
StockMarket right after the Greek currency devaluation. Unlike the usual
simulation models this model is
not of stationary trend. The idea of
nonstationary models came from empirical technical analysis curried out with
massive computations of simulation for the Athens Stock Market of the magazine
« Χρήμα και Αγορά ». In
such simulations, that the random variables are normal, the forecasting of the
regression path and its volatility gives practically all the information.
6) Stochastic refinement of an optimal investment
model of organizations by JorgensenKort. By Dr.C.Kyritsis and P.Sharkey
.Proceedings of the Conference HERMCA
98 at the University of Economics in Athens v 1, pp 413419.
(19971998).
Comments and Interpretation:
This is a
paper that gives a general method to render optimal control models in Economics
to Stochastic Optimal Control Models. It is made use of ITO’s stochastic differential equations (continuous time simulation).
7) An
insurance econometric asset valuation model of the National Technical
University of Athens. By Dr. C. Kyritsis and Prof. Kiochos (University of Pireas).
Proceedings
of the 11^{th} Greek Conference of Statistics held at the University of Crete , in Chania 59
June 1998.(19961998).
(The same paper as word document)
Comments and Interpretation:
This
is the publication summary of a study for the insurance of the Buildings and
Equipment of national Technical University. Due to lack of sufficient easily
analyzable accounting data, it is used
statistical econometrics. To the final estimation is attempted a continuous time best fit simulation
with ITO’s stochastic differential equations of constant growth.
8)
Stochastic
refinement of Pecorinos optimal inflationrate model.
By Dr.C.Kyritsis and Prof. P.Kiochos (European Research Studies
Journal .University of Pireas v 1, issue 4 1998 pp 7784).
(The same paper as word document)
Comments and Interpretation:
The
model of Pecorino asserts that the optimal for society is have nonzero
inflation rate and specifies how much. The idea is that inflation is an
indication of a growing economy.
The
model of Pecorino is deterministic and is rendered to stochastic with the
general method used also in the paper 7) . It is made use of ITO’s stochastic differential equations (continuous time simulation).
9) How to compare bank savings and insurance pensions.
By Dr. C.Kyritsis and Prof. P. Kiochos (University of Pireas Volume
of essays in Honor of Professor M. Raphael
2000, pp 347372) ,
(written 19961999).
(The same paper as word document)
Comments and Interpretation:
The results of this
paper are of interest to the Insurance policies dealers and all that want to invest
in insurance pensions. The comparison is slightly in favor of Bank savings. It
is carried out statistical forecasting at the end of the paper.
10) The risks of bankruptcy in insurance
companies and stochastic stability coauthor P.Kiochos (University of
Piraeus Volume of essays in Honor of Professor
M. Raphael 2000, pp 399408) written 1998.
(The same paper as word document)
Comments and Interpretation:
This is
paper that applies results of stochastic
stability of continuous time simulation models to the investment of
insurance companies. Unlike the traditional analysis of the risks of bankruptcy
through discriminant analysis ,we apply here stochastic differential equations
of constant growth models.
11)
Optimal Portfolio from stocks of the
Index FTSE/20 in the Athens StockMatket and the Period 19971999 .Coauthor
A. Kiochos ( Archives of Economic
History 1999 v XII no, 12 pp 147156).
(The same paper as word document)
Comments and Interpretation:
This is a
classical optimal portfolio selection method that is applied to the Athens
Stock Market. The mathematical techniques belong to nonlinear programming of
operations research.
12) "Estimation of required liquidity for investment position in futures of the Athens derivatives
exchange market." by Costas
Kyritsis Published in
"Essays in honor of the professor
Nikolaou" of the University of Piraeus 2001 pp 729735, Greece.
(Te same paper as word document)
Comments and
Interpretation:
In this paper we discuss the risk of
marktomarket loss of positions with
leverage, in futures. We make the usual assumptions of Lognormal distribution
and geometric Brownian motion for the underlying as in the BlackScholes options pricing model. With these assumptions we estimate tables of required liquidity for futures on FTSE20
and FTSE40 in the Athens Derivative Exchange Market, during the year 2000.
13) The relation of Fuzzy subsets, Postean and Boolean
lattices .The λrainbow lattices . The transfinite real Fuzzy
subsets.(First version 1992)
By
Dr Costas Kyritsis. . Technical University of Crete ,Proceedings of the
VII Congress of Sigef 2000 pp
763774.(1992) .
(The same paper as word
document)
Comments and Interpretation:
In
this paper is proved a kind of equivalence between Boolean (2valued logic),
Postean (3valued logic), and
Fuzzysubsets (Fuzzy logic) lattices.
As
Fuzzy logic is considered an extension of 3valued logic we introduce an
extension of the Postean lattices based on an order type λ, as spectrum of logical valuations, under the name λrainbow lattices. We introduce, also, a kind of arithmetical
representation of the λFuzzy subsets lattices, in
a manner much the same that an geometric line segment is an interval of real numbers. We make use of the transfinite
real numbers of A. Glayzal that later became known and rediscovered by
J.H.Conway as surreal numbers.
14) "Timeseries Simulation of the
income of insurancebrokers ,in Greece(1997)
coauthor: P.Kiochos. Published in the volume B
"Essays in honour of the late professor
D. Kodosakis" of the University of Pireas
2001, Greece pp 533540.(The
same paper as word document)
15) "Estimation of maximum average loss
for investment position in futures of the Athens derivatives exchange market." coauthor: A. Kiohos Archives of
Economic History 2001 v XIII no 2 pp103110 .
(The
same paper as word document)
16) Alternative
option pricing
methods based on the concept of insurance
Published
In “Review of Economic Sciences” of TEI of Epirus, 5, 2004
(The same paper
as word document)
By
Dr Costas Kyritsis and
By
Dr N. Antoniadis T.E.I. of Hpeiros Arta, Greece
In
this paper it is given alternative methods to the BlackScholes method of
option pricing, that give the later as special case. The alternative methods
are similar to the methods of insurance policies pricing in actuarial
mathematics. We leave open and variable which model is chosen for the
representation of the changes in the prices of the underlying asset. Numerical
examples are given. The present method is compared with the traditional of
BlackScholes and are analyzed its advantages.
17)
“Optimal
investment policies and oscillators of stock market
technical analysis. Application in the Impact of the war in Yugoslavia to
the Greek Stock market.”
(The same paper
as word document)
By
Dr. costas kyritsis Software
Laboratory National Technical
University of Athens
Abstract: In this paper we analyze some price oscillators of stock market technical
analysis as linear digital convolution filters. We review some of the
theoretical published research on optimal trading policies in stock markets and
we give an application of this approach in the negative shock impact of the war
in Yugoslavia to the Greek stock market.
Key words: Portfolio Selection,
technical analysis, stochastic optimal control, digital linear filters, time
series. JEL C3, C4, C5
Research ideas under development
18)
Coupled macroeconomic growth
and exchange rates crises.From
WinLose, to WinWin interaction
By Dr
Costas Kyritsis University
of Portsmouth Faculty
of Sciences and Technology
Dept. of
Mathematics and
Computer Science Fr. in
Athens, Greece.
In this paper we
formulate and study the interaction of the macroeconomic growth of two economic
entities, that leads in to oscillations. Compared to the system of equations of
a closed Economy of HansenWright (1992) the present approach makes use the
simplest possible system of equations that produce oscillations, and is a
different system of equations. It is also a new and different system of
equations for demand and supply interplay that leads to oscillations. This
interaction usually occurs when the first of the two organizations or economy
gives its output product as input resource
to the second. We formulate it
either as linear system or as a logistic nonlinear growth system, with
the Volterra equations of Ecology, where the first organisation is the prey or
host and the second is the predator or parasitoid. This implies a waving
balance of the various domestic economies or organizations that fall in to such
interactions and define in the economy reflecting pulsations that can be
considered as part of the "ecological life" of the collective
activities. We can derive these equations from probabilistic assumptions of
coupling in the growth of populations, and described as Branching processes. We
shall not present this derivation of the proposed equations of coupled growth,
from assumptions on Branching stochastic processes, in this paper.
If we reformulate the coupling
interactions with linear equations then the qualitative dynamics of such a
simplest system is destruction of one of the two parts. The
above is a characteristic case ofa winlose interaction. We discuss how
interactions under the spirit of winwin policies, are formulated as
linear coupling that does not lead to oscillations.We give applications, 1) in the buying demand and selling supply of stock
exchange markets and in general of any deman and supply interplay 2) in the
interaction of the banking system and
the organizations, 3) in the
interaction to the stock exchanges and the real business of the
organizations 4) in the interaction to
the stock exchanges and the banking system, 5) In the interaction of money
(Liquidity) and gross domestic product in a close economy where in addition
prices and riskfree rate participate in the equations 6) in the interaction of the exchange rate in
the currency market and the balance of payments as determined by
importsexports, 7) in the interaction
of the 1^{st} world economies and the 2^{nd} world economies.
We discuss the international monetary system of the floating exchange rate, in
which the exchange rate is over determined by the speculation in the currency
markets and is not so much determined by the gross national product and the
riskfree rate of the domestic economy after the purchasing power parity
principle. We discuss the resulting crisis like that of Mexico in the 80’s and
the recent of Argentina. We suggest plausible cures, that are mainly a regulated
by international law, floating exchange rate, within limits determined rigidly
from the internal parameters in the domestic economy like that of the national
gross product and bank’s riskfree rate.
See
also he very interesting Blog about how the overdebt is created in the monetary
system
http://overdebtmonetarysystem.blogspot.gr/2012/04/1howcurrentmonetarysystemcreates.html
19) Speculations about
electronic currencies, about exchange rates, ownbanking for each
company, private web based exchanges, wellness insurance, charity and
other new methods in capital markets and macroeconomics, through the
information technologies in the new millennium.
By Dr Costas Kyritsis University of Portsmouth Faculty of Sciences and Technology Dept. of Mathematics and Computer Science Fr. in Athens, Greece.
In this paper we go one further step in suggesting solutions
to exchange rates crises. We speculate on new procedural methods of stock
exchanges, capital markets and banking that became possible in the new
millennium, through the Internet, and Information Technology. The new methods
should make the macroeconomics more robust, stable, clear in the economic concepts
and objectives, while at the same time permitting even more flexible and fast
handling of the demand and supply in the Markets. We speculate on the following
new rules and methods:
1) Many International electronic currencies, but with mixed
free exchange rates and regulated exchange rates. To avoid in the future
for other countries exchange rate crisis like those of Mexico and Argentina, a
return to the original concepts of Breton Woods about exchange rates is
required. The present situation is a completely freefloating exchange rate,
determined my the demand and supply. This is basically not wrong, but if
it is the only factor determining the exchange rate it, obviously creates an
extravagant bias as far as it concerns valuation of the fixed assets, of a
domestic economy. If we imagine a domestic economy as a very large company, it
is as if permitting to valuate the total assets of the company only from the
size of the sales of one only turnover! It does not seems fair. Therefore the
suggested is a weighted average exchange rate
R=a*R(floating)+(1a)*R(Domestic_Product_,_fixed_assets,_public_bonds_prices).
In other words the final exchange rate is a weighted average of the floating exchange
rate determined as it is by now through demand and supply, and an exchange rate
defined though the gross domestic product and fixed assets of the domestic
economy. The weight a is a Governmental or International decision. Nothing
changes in the practice of Interbank transactions, in the currencies,
except that the effect of free demand/supply in the currency exchange rate
changes is less. As practically within 3 months the term
R(Domestic_Product_and_fixed_assets), is not changing, the variations of the
exchange rates as we watch them in computer monitors are just reduced by an
appropriate factor, that depends on the weight "a" too.
2) An alternative solution: The present demand and supply for a
domestic economy's currency, is substituted with the demand and supply of
domestic public bonds, of fixed price, so that each item bought is issued at
the same time and each item sold is withdrawn at the same time. Thus buyers and
sellers have transactions not between them but always with the central bank of
the domestic economy. The return of the buyers of the fixed price public bonds
are through dividends depending on the GNP, or on the balance of payments
(importexports ,etc). The capitalization of the financing of a domestic
economy and its foreign currency reserves are thus floating, plus the
uncertainty about the dividends, and not the price of its bonds or its currency
rate, which is fixed. As alternative we may define the final currency exchange
rate as a weighted average of the exchange rate as determined my supply and
demand of the currency and the variable by supplydemand of the price of its
bonds. As these two are often negatively correlated, the final exchange rate is
more stable. The domestic economy is in this way is safer as far as
its wealth is concerned, not endangering an exchange rate crises like that of
Mexico in the 80's and Argentina's in the 00's, after an unlimited and panicked
speculation on the currency. The Domestic economy would not let the minority of
trading speculators, to determine the size of its wealth and
capitalization through the exchange rate level. The present situation is, if
put by an analogy in microeconomics, a situation where, vendors, and customers
of a company (analogue of foreign consumers and investors to the Domestic
Economy), would determine, the price and value of the fixed assets of the
company (analogue of fixed assets of the Domestic Economy), by the balance of
Demand and supply on the products outputs and inputs of the company (analogue
of importsexports and balance of payments). This "tightens" of
values of the cycle of the turnover and sales with that of long
termcapitalization and fixed assets, which is not really necessary, and in
fact it has been proved very dangerous for crises in Domestic economies. G.
Soros has already remarked on this weak point of the present system of exchange
rates and has given long interviews about its role in generating exchange rate
crises. Of course such a new suggested system would still not protect a
domestic economy, from bankruptcy due to bad economic planning and performance
or other wrong activities. The Purchasing Power Parity Principle , and
the Interest rate parity, as far as investments in the public bonds, have
better chances to hold, as the Domestic economy, can adjust the rate of return
on the bonds, in the form of dividends, according to the riskfree rate, and
inflation, so as to have in all domestic economies practically almost the same
rate of return. (In the present system this was regulated through the exchange
rate floating by Demand and supply). I addition in rare cases from time to time
the Domestic Economy may adjust the fixed exchange rate (if it is not the case
of one universal currency) so as to be closer to a Purchasing Power Parity
Principle. .
3) Derivatives exchange markets can still run in such a system, E.g.
futures and options, defined on all levels of leverage, from leverage 1, (which
would be equivalent as far as the risk is concerned to the older buying and
selling of the currency units), till the present levels of leverage, and
margin. The futures and options are cleared, at the expiration date, on
the total number of bonditems of the domestic economy on that date, and on
their prices that are fixed.
4) Own Banking of Large Companies. Large companies get rights
similar to banks. In other words the public can deposit money and take a
deposit rate, while the company can invest or lend these funds. A percentage of
the capital of the company is thus financed in this way. In this way every company that meets some qualifications (similar to the ones required to issue bonds or stock exchange
securities) may have its own banking system. It can keep say for reasons
of liquidity and to meet the floating of the demandsupply, as the banks do so
with the deposits, the 20% of the capitalization, and use the rest 80%. The
creation in this way of an "ownbanking”, for every company, would make
the economy, even more efficient, flexible, and stable. This would be the
analogue in macroeconomics, to the advance in Politics from the age of
AristocracyOligarchies to Democracy the central economic power of banks, is
distributed, to local "smallbanks", one for each company. See also http://overdebtmonetarysystem.blogspot.com/2012/04/1howcurrentmonetarysystemcreates.html
5) Derivatives exchange markets can still run in such a system,
E.g. futures and options, defined on all levels of leverage, from leverage 1,
(which would be equivalent as far as the risk is concerned, to the older buying
and selling of the companies securities), till the present levels of leverage,
and margin of the derivatives. The futures and options are cleared, at the
expiration date, on the total number of bonditems or shares of the company on
that date, and not on their prices, which is fixed. Those that want to risk fast gain or losses, must trade in the
Derivatives markets. As alternative the underlying of the
derivatives could be the dividend rates of such bonds.
6) This new system of demandsupply for the capitalization of a company,
and the speculation through derivatives on it, can be implemented with private,
capitalmarkets, and derivativesmarkets or exchanges The advantages
for the companies in such a more rational capitalization system, may
create increasing demand for smaller companies to participate in such
privatecapital markets, and permit successful emergence of private capital
markets.
We discuss the stability, and Freedom, advantages of these new methods
in the societies. Although this system may seem almost the same with the present, this
minor difference makes a big change in the stability, efficiency and fairness
in the world of investments.
20)
PARETO
OPTIMAL WITH WIN/WIN GAME POLICY, MACROECONOMIC MODELS THAT INCLUDE HOUSEHOLDS,
INDUSTRIES, BANKS, AND GOVERNMENT’S DECISIONS. ETERNAL CYCLES IN
MACROECONOMICS Applications in the reduction of unemployment.
By Dr Costas Kyritsis (2005)
0 The main purpose of this research is to show
how the principles of Pareto in macroeconomics that state e.g. “the profits of
one part of society are not necessarily the losses of an other part of society”
can be modeled and proved with simple linear mathematical models. A classical
simplistic example is the next: Imagine the economy of an island of 10
inhabitants, that it has a small hill with forest and a river , a small lake, a
green field, and many small gulfs. A win/lose approach to wealth would
correspond to the choice that all inhabitants rush to cultivate the green
field, and produce agriculture goods. Obviously in such a choice the wealth of
each man would antagonize with the wealth of an other as all are concentrated
only only the green field which becomes a scarce resource. It is a win/lose
solution of a zerosum game. As an alternative choice in the Pareto principle
and a win/win approach would be that the inhabitants diversify in
wooden crafts from the forest, in water mills from the river and the lake and
in fishing from the lake and the sea. Obviously the wealth of each adds to the
wealth of an other and to the total domestic product and wealth of the island.
In the same simplistic example we may realize how unemployment is created
and can be reduced. Assume that all the 10 inhabitants are fishermen,
fishing each with a fishingline. As technology changes a new technique of
fishing emerges which is called fishing net. Now only two inhabitants are
needed, one to drive a little boat and an other to handle the fishing net. The
volume of fishes only from the two inhabitants with the net is the same
with the volume of fishes produced by all the 10 inhabitants with fishing
lines, so 8 of the inhabitants remain unemployed. We have now 80% unemployment.
The governments of the island can choose a socialistic approach in which it
puts high taxes to the 2 fishermen with the net to give to the 8 unemployed.
This could be a solution but it does not help development of the economy of the
island. An alternative solution to the problem of unemployment is to discover
and create new goods and services to absorb the unemployed. E.g. The 8
unemployed inhabitants could learn how to make furniture from the wood of the
little forest and to cultivate the field in the island. This would not only
give them the necessary wealth but a wealth that does not antagonizes but
supplements the wealth of the other inhabitants , contributing so in a larger
total domestic product of the island. It seems that the correct solution would
involve a compensation of both alternatives a short term application of
the "socialistic" in a smallest measure, just to heal the first
crises and then a long term effort for the second which really solves for even
better the problem and it is certainly creative for the society.
We use inputoutput equations in a more
comprehensive way than Leontief. From this point of view the research can be
classified as anew category of equilibrium models, although, the only strictly
speaking the only “equilibrium” is just that all accounting transactions
clearout . On the other hand such formulations can model optimal growth under
specified objectives. I was inspired for this approach from general equilibrium
models of economies within the European Union that tried to estimate the
“costs” in the EU economy of reducing the CO2 emissions.
The present models prove that all sectors or
domestic economies can profit , and that the losses of one sector are not
necessarily the gains of another sector. Similar applications can be described
with a model of interaction of EU and United States economies. Therefore
from the game theoretic approach are considered a nonzero sum games.
1. This paper contains a miniature model of 1624 equations , based
on linear system, or linear programming inputoutput equations.
We chose linearity so as to have the
mathematical part soluble and concentrate on the economic interpretation. We
chose therefore the Leontief approach except that in the present paper we are
including both physical products, together with financial services (money
flow)in the same equations.
2. We first defined a
network, for all transactions, and productions. For any network there is a
vectorspace (over Z2 Galois field) of cycles, and a dual space of cocycles,
and also a matroid of circuits which is purely algebraic , that describe all
dependences, with concepts like "base", "dimension", even
if someone puts nonlinear economic equations for the network. The later linear
system of inputoutput (and dual of outputinput) is simply an isomorphic
replica of this structure in some abstract category. To every cycle corresponds
exactly an equation.
3. We used only one (linear) household, a (linear) industry, a (linear) bank, and a
(linear) Government. The behavior of each of these entities is left
completely open , and is set by the technology, and flowdistribution
decision coefficients on the network of flows.
(behavior of household: labor, purchasing, savings,
borrowing, investments etc and similar for industries, banks, government). In a
computer interface they are determined interactively by the user. The
assumption of linearity is reasonable for a small range of the quantities and
time duration (this is true for the linearity of accounting equations too).
Linearity gives constant returns on scale.
4. To preserve the
technique of duality of Leontief we used so many variables so as to have
one equation for each output product or service, and not one equations for each
entity.
5. The equilibrium here has
simply the interpretation that "all transactions clearout"
6. For a household,
purchasing of tangibles, borrowing, investments , and fixed assets growth are
all included.
7. For industries, and
banks, dividends of equities (profit),
and reinvestment growth of fixed assets are included, as well as capital
mobility
8. For Government, are
included ,issuing of money , taxes, and fixed assets growth, too.
9. The Leontief duality is
represented here not as a duality of flow of
tangible products and finance, but a duality based on that each
transactions has two flows, the one is the service or good (including funding,
investments etc) and the other the exchanged price of it. Of course interest
rate is the price for money, and so are dividends. Taxes are the prices of
government services.
10. The dual system is a
system of prices (including interest rates, dividends, taxes etc), and there is
one (accounting) equation for each product or service (including investments,
liabilities, growth of fixed assets, and money issuing), and not one only accounting equation for each
entity.
11. The system can be
solved either as a linear system or as linear programming system. In the latter
case we may put inequalities to scarce resources, like labor with limits both
upper as true constraint, and a lower only for assessment of existence of
unemployment.
The objective can be either a maximization of weighted
average of growth of fixed assets or wealth and aggregate domestic product, or
a maximization of preemptive ordered pair of them
(first we maximize
the one and then on the remaining degrees of freedom the other). This is only a static oneperiod
optimization. For an intertemporal dynamic optimization, we may require to find
as optimization solution the weights (static social welfare policy) in the static objective function so
as to maximize final wealth or a linear utility function of it. The evolution
or multistep (period) development of each entity (Household, Industry, Bank,
Governmentstate ) can be represented with cash flow systems that at each time
step or period the cash flow is the increase or decrease of assets,
equities , and liabilities. In this way each entity reflects the elementary
functionality of banking.
From the above we
deduce that the evolution of solution prices from period to period, derives the
inflation rate too, changes in the interest rate, changes in profitability, growth
etc.
12. Thus equilibrium is
used here both with optimality. Equilibrium is only the minimum constraint of
"all transactions clearout", while the behavior of households,
industries, banks, and Governments is not locked by any theoretical assumption,
but is set by the user at each period. Optimality is in the context of social
welfare, and any static optimal solution is also Pareto optimal (Pareto
approach: " The profits and wealth of a part of society do not need to be
a loss to an other part of society").
13. The spirit of this
optimality is a winwin approach, as the issuing of money (monetary policy)
permits solutions where all entities have a nonnegative growth and profit,
although not equally distributed (usually the smaller in size entities have
larger growth rate, compared to larger entities, but viceversa at values, not rates). Thus it is not a
zerosum game, although it may be defined if we want as a zero sum game if we put nature as the loosing part, and
force conditions of zero sum game.
14. An even simpler system
can be written for two domestic economies or e.g. European Union/United states,
where again a winwin linear optimal solution is possible, with both sides
growing, although not at the same rate. The exchange rates of the currencies is
derived from this system, by a simple formula from the linear equations. Such
pairs can be considered also as matrices of linear games, and its solution as
solutions according to optimization of an objective.
15. The effect of discovering and creating new
goods and services can be simulated in the model by adding new types of
industries of new goods and services that absorb the unemployed. The
final solution can result with higher total gross domestic product. This shows
how the problem of unemployment can be solved creatively with a result
of improvement of the domestic economy.
16. The previous model can me easily solved by Excel's solver. For
a large version of it, the linear system approach (Recursive numerical
algorithms) is tractable as far as computer complexity is concerned, while for
a linear programming approach, the Carmakar's algorithm is required instead of
the simplex algorithm (the latter solves usually up to 6,000
variables/equations while the former 160,000 or more). The model can be
developed as a user interactive computer game on a site in the Internet.
17. This simple linear macroeconomic model, can
be formulated as a stochastic process too, if we assume that the
independent variables, e.g. volumes of production of goods and services are
random variables. Then the linear deterministic equations above are used simply
to calculate the dependent random variables.
18. The input random variables can be set to
contain random cycles that come from the supply of agricultures raw materials,
and conditioning of human activities , labor, energy consumption etc from
meteorological cycles. Thus cycles of daynight, week, month. year's
seasonality, 11years sunspot cycles etc can be included in the model. The
author suggest 12 cycles at 12 different time scales, that are
measurable fertility cycles of the biosphere, and measurable
meteorological cycles too. These cycles have fixed average period connected to
fixed periods of earth and other celestial bodies (like moon, sun etc) cycles. A
concise table of these cycles as can be measured in meteorological and
ecological magnitudes can be found in the page for the meteorology in the
present site.
19. The author has made extensive studies with data, spectral analysis,
and simulation that confirms the existence of these cycles both in the
meteorological and macroeconomic magnitudes. It is not trivial to prove that if
the independent production volume of input resources and independent input
prices have a spectrum with discrete counter part on the above 12 spectral
areas then the dependent production volumes of goods and services and
dependent prices would have also a spectrum with the same structure. In
other words the above macroeconomic structure leaves invariant the spectrum
structure as far as the existence of the above 12 stochastic periodicities is
concerned. The value of realizing the existence of these celestial and
eternal cycles in macroeconomics is great: By realizing that supply of raw
material shall follow such cycles, domestic economies can arrange for a
smoothing out of them by storing excess raw materials if possible. Also by
realizing that the demand for energy, due to these cycles in meteorology , will
follow similar these cycles too, we can arrange again for a smoothing out
by storing if possible excess energy or arranging for the possibility of excess
production. The ancient story in the Old testament of the Egyptian Pharaoh's
dream and its explanation by Joseph, of the 7 fat and 7 slim
cows is an example of how such knowledge can be used. The effect is higher
stability and equilibrium of the macroeconomic systems. In addition
application of these cycles that modulate the hazard rate of events insured
by insurance companies, improves the pricing methods of insurance
contracts, make insurance business safer.
20. Such a stochastic cycles quantitative
description, reflects the permanent exogenous conditioning of macroeconomics,
by causal sequences that fall in the area of study of ecology, meteorology,
and eventually astronomy. It seems that such an exogenous
causal source of macroeconomic and business cycles is the only truly
permanent and stable that can lead to sound and wise scientific
description. The difference of the above approach as compared to the
standard approach in which we intent to forecast the particular year or month
is great!
In the usual approach are used mathematical or
statistical models to forecast the particular season or year or 5.5 year
horizon etc, while in the present approach is anticipated the generic and
eternal cycle of season or year or 5.5 year horizon etc. The mathematics
are completely different too as the dynamics of the production of the
particular period is considered only as "noise" to the dynamics of
same generic or eternal period.
The main value of knowing and
measuring eternal cycles in the macroeconomic systems, that have their source in
exogenous to society sources (meteorology, nature etc) is that the society can reduce the variance by provisions.
References for cycles: The next books are
excellent references for the old concept of cycles in economics 1)
"Weather cycles (real or Imaginary?)" by Williams James Burroughs 2nd edition
Cambridge 2) Economic Value of Weather
and Climate Forecasts (Hardcover)
by
Richard W. Katz
(Editor),
Allan H. Murphy
(Editor) Cambridge University
Press 1997 3) Business Cycle: Their law and cause By Henry Ludwell Moore
(Columbia University) 3) Business Cycles The Nature and Causes of Economic
Fluctuations Books Thomas E_ Hall 4) Business Cycles, Indicators, and
Forecasting (National Bureau of Economic Research Studies in Income and Wealth)
Books James H_ Stock, Mark W_ Watson
Key
words Macroeconomic Models,
General Equilibrium models, InputOutput equations, Pareto Optimality, Win/Win
game policies, European Union macroeconomic models, Planetary macroeconomic
models, business cycles, macroeconomic cycles.
21) Different roles , definitions and concepts of money at different
organization levels in society.
Wealth, charity, welfare and public goods.
By Dr Costas Kyritsis (2005)
In this article we analyze how the role and concepts of money changes
essentially as we move from low and simple structure organization levels in
society (like transaction, individual, enterprise) to more complex (like large
groups of companies, public economics, domestic economy currency etc). Charity
and public services is discussed in relation to the definition of money at the
level of enterprise and domestic economy. The next table gives a sketch
to the different definitions of money
Organization level in society

Role , value, and definition of money

0)Object

Valuable object
due to contained precious metal (e.g. coins from gold or silver)

1)
Transaction

Means of
exchange

2)
Individual

An
informational measure
of personal activities awareness and a way to freedom of activities and
choices. Also a measure of “share” in the social power ,goods and
services.There is practically an average size of
relevant wealth. All surplus wealth, plays the role of enterprise money in
the next category.

3)
Enterprise

"Raw
material" to organize, hire people and "seed" for
organizational and group activities growth and multiplication. Also a measure of “share” in the
social power and goods, and a special type of information.

4) Single
domestic economy

A measure
of internal circulation of the goods and services, and a special type of
information.

5) Many
domestic economies with many currencies

A measure
of external interaction of the two economies as mutual flow of goods and
services and a method of indirect pricing of domestic goods and services of
the one economy from the goods and services of the other economy

See
also he very interesting Blog about how the overdebt is created in the monetary
system
http://overdebtmonetarysystem.blogspot.gr/2012/04/1howcurrentmonetarysystemcreates.html
22) EDUCATION
AND THE SUBJECTIVE EXPERIENCE ON THE PATH OF BUSINESS SUCCESS
By
Dr Costas Kyritsis School
of Management and Economics
Dept.
of Finance and Auditing
Technology
Institute of Epirus
Preveza, Greece
ckcute1@ckscientific.com
ABSTRACT
In this
short note we discuss the gap of the principles of education as seen from the
academic world and as seen from successful businessmen that tried to communicate
their experience. In particular we focus on the subjective experience on the
difficult path of financial success and its background emotional qualifications
(EQ) in the individual’s consciousness. The results are a challenge and a
surprise to the academic common sense. JEL A2 Key words: Teaching Economics, Emotional
Intelligence, Education.
(The
same paper as word document)
23)
The Principle of MacroeconomicMicroeconomic structural
and dynamic correspondence
By
Dr Costas Kyritsis (2006)
In
this paper we develop a bold interpretative principle , according to which any
macroeconomic system has a bold correspondence in its structure to a
microeconomic system (e.g. business, company). E.g. the InputOutput equations
of Industries of Leontief, would correspond to similar equations of Production
Departments or Profit centers of an enterprise. Under such an interpretative
principle, many of the old macroeconomic debates about the relation of the
observable macroeconomic magnitudes like, rates, inflation, unemployment ,
growth, prices etc are resolved under new understanding. This principle can
apply also in to a similar correspondence in the structural equations of an
Enterprise (midscale economics) and a Household (microscale economics).
We do not claim that there is a full selfsimilar correspondence , but only
a correspondence that when it is from larger scale to shorter scale it
looses information and detailed structure, but some of its structure can remain
invariant. In the terminology of the mathematical theory of categories, it would
be an homomorphism rather than isomorphism. The same principle can apply to larger macroeconomic entities like
union of domestic economies e.g. European Union, and a single national domestic economy.
The basic household economics equations, and enterprise accounting system
equations (5 basic equations) , give rise to corresponding macroeconomic systems
of equations.
From a mathematical point of view the similarity correspondence
is quite more clear as in all three or four cases (two in macroeconomics, microeconomics and
Household) similar linear systems of inputoutput equations are formulated.
Especially for the nano or microscale economics of household behavior we
introduce a , I think a revolutionary, conceptual innovation: The single
household behavior is not described by a single household utility function, but
by many utility functions (vector utility function of a single household) that are
linear functions of resources and other household's utility functions of the
same household. E.g. we may postulate food utility function, cloths utility
function, entertainment utility function, education and personal development
utility function, leisure utility function , and in addition utilities attached
to achieving goals per time scales like day's goal achievement utility , week's
goal achievement utility , month's goal achievement utility, quarter's goal
achievement utility etc. I believe that in this way the
behavior of the individual is better described and is not put to a monolithic
totalitarian single scalar utility function. Not all are comparable in the
"feelings" of the individual with a totally ordered utility function.
This multiutility householders behavior is I believe appropriate for the
emerging individual's globalization behavior, that for the moment we observe for
individuals that run globally successful dotcom internet companies. The scales
are not only two, Domestic Economy and enterprise, but rather at least four:
The global international realm, the domestic national economy (the latter two
are traditionally studied in Macroeconomics), the enterprise and the household
(the latter are usually included in the studies of microeconomics).
24) The
Rainbow model : The effect of natures multiscale cycles on the stochastic
growth of the wealth of nations.
By Dr Costas Kyritsis (2006)
In this paper we describe
the sequence of causalities from nature's 12 cycles (from 11 years to 5 minutes)
that influence economic cycles. The sequence of effects may belong to many
different sciences and disciplines like astronomy, meteorology, ecology, and
economics (macroeconomics and microeconomics). The 12 cycles include the
11years cycle of solar activity, that is reflected to weather cycles and
ecology cycles (detectable e.g. at treerings , rainfall, and water level of
lakes) as well as the year cycle. All the 12 cycles already have been studied
and detected in modern meteorology. The stochastic process that is used to
formulate the random influence of matures cycles to economy, is an entirely new
mathematical concept and is therefore a new discovery also in the science of
mathematics and statistics. It has the features of multilayer causality and
memory, "vertical" or interlayer laws as well as "horizontal" or time recursive
laws. The effect of natures cycles in the economy is not necessarily cycles but
something simple, and at the same time random enough to reflect most of the
observable charts and economic data. Some of the hidden harmony in economy may
depend on natures cycles but the observable is not always a visible cycle. We
concentrated only on the effect of natures eternal cycles. All the
non temporary endogenous cycles of the economy, tune to the eternal
exogenous nature's cycles. Although many of the economist would focus on
endogenous causalities in social economics, the exogenous (nature) and
endogenous (society) effects, essentially coincide in timing. It took the author 7 years of
intense study of economics data and computer simulations to conceive the
stochastic process of Rainbow, and the implicated philosophy in the causes of
economic phenomena. Such a knowledge that links the design of the action and
changes in the solar system, and earth, to the design and patterns of economic
action in societies, is developed so that all nations great and small can
balance, and protects their life energy and wealth resources, in an ever
changing world. In view of the expected extreme weather phenomena of the first
part of the 21st century it seems that it is an even more valuable knowledge.
The "world game" of international interactions is definitely played better with
better worldleverage for each economy after the realisation of the economic
significance of the knowledge of the Rainbow cycles. It
is a basic chapter in an "operating manual of spaceship earth" , as Buckminster
Fuller would put it, so as to lead to a intelligent living of individual
human beings, that is healthy, abundant, fair, safe and satisfactory for
the body, the feelings , the intellect, and the metaphysical element. This is to
be contrasted to a suicidal life of nuclear wars threat, based on economic controversies.
Let me quote this great 20th century thinker, that has a
kind of thinking that would support the synthesis of sciences and causalities of
macroeconomic phenomena in the above research. He is the famous to many
Buckminster Fuller, in his manuscript "Grunch of Giants"
"Before humans could be designed to occupy it, planet Earth had
to be designed. Before planet Earth could be designed, the solar
system had to be designed. Before the solar system could be designed,
galaxies had to be designed. Before specialcase galaxies could be
designed, specialcase macromicro Universe, all its atoms and
molecules, gravity, and radiation had to be designed. Before any
realizable designing was possible, it was cosmically necessary to
discover and employ the full family of eternally coexistent and
synergetically interaugmentative, onlybymathematicalequations
expressible, intercovarying, generalized principles governing the
generalized design of eternally regenerative scenario Universe. And
before all recognition of the eternal generalized principles and
their inherent designscience functions, it was further necessary to
have:
 The design of an eternally regenerative, radiationally
expansive and gravitationally contractive, everywhere and
everywhen complexedly intertransforming, nonsimultaneously
episoded, scenario Universe.
 The generalized design of galaxies of entropic matterintoenergy
as radiationexporting stars and generalized star systems of
planets serving syntropically, as radiationintomatter
importing planets.
 The design of planet Earth as the Sunorbiting, biosphereprotected,
and oxygenatmosphereequipped incubator of DNARNA designcontrolled
biological life and of that life's photosynthetic conversion of
entropic radiation into syntropic, orderly hydrocarbon molecules
and a vast variety of hydraulically compressioned, crystallinely
tensioned, exquisitely structured biological species omniinterregenerating
as an ecological omnilife and humanthinking supportsystem.
 The eternal mathematics — numbering and structuring. The
eternally extensive mathematical spectrums of frequencies, wave
lengths, and harmonic intervals.
Only thereafter could those human beings progressively reevolutionize
exclusively by trialanderror enlightenment, from their bornnaked
state of absolute ignorance, to discover their scientificprincipleapprehending
minds and thereby (now for the first possible moment in history) to
glimpse humanity's semidivine functioningpotential as localUniverse
criticalinformationgatherers and localUniverse problemsolvers in
support of the integrity of eternally regenerative Universe."
"The Things to do are: the things that need doing, that you
see need to be done, and that no one else seems to see need to be done.
Then you will conceive your own way of doing that which needs to be done
— that no one else has told you to do or how to do it. This will bring
out the real you that often gets buried inside a character that has
acquired a superficial array of behaviors induced or imposed by others
on the individual. "Letter to "Micheal" (16 February 1970) Micheal was a 10 year old
boy who had inquired in a letter as to whether Fuller was a "doer" or
a "thinker".
"
There is an inherently minimum set of essential
concepts and current information, cognizance of
which could lead to our operating our planet Earth
to the lasting satisfaction and health of all
humanity." From Synergetics 1, The wellspring of
reality. (see also about "the world game" in
http://www.worldgame.org, and
http://www.osearth.com )
Buckminster Fuller, was a globalthinker of
the middle of 20th century worked so as to create a
mimimal system of concepts, and processed
contemporary information , in cosmology, philosophy
and metaphysics, physics, ecology, engineering,
architecture, design poleodomia, economics,
sociology, politics, education, etc so that people
in any nation, can think, feel, and act to a living
that does not lead to the extinction of life on all
or part of the planet Earth.
Remark : For
further ideas on the rainbow process see the blog
http://rainbowquotes.blogspot.com
25)
NOTE ON THE EFFECT OF THE 11 YEARS GLOBAL CLIMATE
CYCLE ON THE
PRICES OF THE CAPITAL MARKETS
By
Kyritsis Costas , Sotiropoulos Ioannis,
Gogos Christos, Kypriotelis Efstratios.
Department
of Finance and Auditing , TEI of Epirus, Preveza,
September 2007 Greece
In this paper we prove and analyze the effect
of the
11 years sunspot, and global climate cycle, on the
volatility of the prices of Stock Exchanges. We
predict an increase of the prices from the present
time (2007) till 2011, a next major maximum of the
prices during 20102011 and a fall of the prices for
the period 20112017. We discuss sequences of causal
explanations based on the balance of demand and
supply and comment on the general value of such an
omniscience wisdom that
involves at least five different sciences.
The
paper as word document
Remark 1
The Journal Archives of
Economic History is an Internationally accredited Academic Journal .
This is proved as it can be found in the International Database ECONLIT
which is the standard database of economic literature in most University
Libraries.
Remark 2: For further ideas on the rainbow process see
the blog http://rainbowquotes.blogspot.com