Sunday, February 8, 2009

SUMMARY: Systems Theory an the General Laws of Money Circulation


Aurelio Ojeda


Summary:


The Systems Theory is a teoretical frame for deduction of the equation of the general money circulation, which could be an importanta step toward formalization of the economic theory based in offer and demand. The results of 80 tests made possible the direct observation of theoretical elaborations, with significant (p<0.05) regression (0.67 < r2 < 0.71) for the links between Offer and Demand, which also were leading indicators in 67-78% of the price turning points.

(dE/dMc)(1/D) + Of (d2E/dM2c) dt = 0.

It is possible to transform this equation in the formula of the increase of information, which valued must be allways negative:

-ln(dE/dMc) = 1/D Of


Where: E = Cinetic energy of merchandise and services, Mc = Circulating money, D = Demand, Of = Offer


Academy of Economics and Finance, Papers and Proceedings, 34th Annual Meeting.

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