preprints.org > social sciences > behavior sciences > doi: 10.20944/preprints202408.0810.v1 (registering DOI)

Preprint Article Version 1 This version is not peer-reviewed

Version 1 : Received: 8 August 2024 / Approved: 10 August 2024 / Online: 13 August 2024 (05:27:28 CEST)

This paper proposes a novel economic theory - Economic dynamics, which is the first in a series of articles on the economic dynamics. This paper is divided into four sections. Section 1 discusses the methodology and significance of the economic dynamics. The application of the standard model of theoretical physics as a new conceptual and modeling reference framework for the economic dynamics is an inevitable step beyond the Newtonian mechanics framework. Section 2 briefly outlines the content of the economic dynamics and its standard model, including market dynamics and its quantum electrodynamics model, both sharing the U(1) symmetry group; the sub-economic dynamics and its quantum chromodynamics model, both sharing the SU(3) symmetry group; the economic externality dynamics and its isospin dynamics model, both sharing the SU(2) symmetry group; and the ordinary rationality mechanism and its Higgs mechanism model, both causing spontaneous symmetry breaking. Additionally, through analysis of Pareto efficiency, it outlines economic gravity and its general relativity model. Section 3 provides three necessary foundational theoretical preparations for the economic dynamics, detailing scientific observation theory, economic rationality theory, and monetary pecuniary theory. Scientific observation theory first introduces the concept of observational directionality for empirical sciences, providing a shared orthogonal frame for cross-disciplinary observation, termed the orthogonality principle. By introducing the concept of observational disturbance degree, it distinguishes between high disturbance quadrants and low disturbance quadrants, corresponding to different mathematical paths, termed the diagonal rule. Quantum physics, higher-order cognition, and economic forward observation all fall within the high interference area, belonging to von Neumann's "yes-no" type of measurements, and are suitable for the same mathematical description. Economic rationality Theory, within the decision theory framework, defines three types of rationality theories: Economic rationality (or economic rational man), bounded rationality, and ordinary rationality, and defines the position of each rationality theory in the gauge field theory model of market dynamics. Economic rationality is a personified description of perfect competitive markets, the former being the global gauge potential, while the latter is the global gauge field strength. Bounded rationality describes specific market participants, the former being the local gauge potential, while the latter's market performance is the local gauge field strength. Ordinary rationality is the market ground state, possessing the properties of the Higgs field and the functions of the Higgs mechanism, causing spontaneous symmetry breaking in the market. The monetary pecuniary theory first argues for its light-like nature, thereby establishing a special relativity model of monetary peculiarity. This is a necessary condition for applying the gauge field theory model in market dynamics. Within the special relativity framework, using absolute prices (absolute time), a geometrized global money cone (light cone) can be constructed. Using intrinsic prices (proper time), individualized local wealth cones and poverty cones can be constructed, reflecting individual differences among market participants.

Economic dynamics; standard model; gauge field theory; globality; locality; gauge symmetry; symmetry breaking; observation theory; rationality theory; pecuniary theory

Social Sciences, Behavior Sciences

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