NMPC-Graphs in Economics

In classic economy, models frequently are described like physical models, i.e. they are described as mathematical equations or differential equations with constants and algebraic operators.

In contrary to physics where such mathematics is based on precise axioms, axioms related to economy often are rough approximations of real world and therefore mathematics based on them also approximates only roughly.

However, many econometric models can be expressed as NMPC-Graph and can be converted via CYNERELO™ into a precise quantitative NMPC-model. In doing so, there emerge precise graphic shapes for the unknown and potentially nonlinear functions of the model and in addition, the resulting time series.

In the following sections there are presented examples of NMPC-Graphs related to classic econometric models, although generalizing them. Together with CYNERELO’s regression ability they allow for more lifelike models.

 

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