The accuracy and effectiveness of economic theories and policies are heavily influenced by the selection of economic variables and processes used to describe economic reality. This poses a challenge in assessing which variables and processes are responsible for driving economic evolution. The existing economic theories only capture a small fraction of the factors that contribute to economic dynamics, leaving numerous important variables and processes unnoticed or overlooked. In this study, we explore these unnoted factors that play a significant role in determining the states and predictions of real economics. We specifically focus on collective economic variables, collective transactions and expectations, mean risks of economic variables and transactions, as well as collective velocities and flows of economic variables, transactions, and expectations. These factors have been largely ignored in current economic theories but are crucial for understanding the evolution of economies. Additionally, we introduce the concept of market-based probability of asset prices and highlight the unnoticed influence of market stochasticity on the randomness of macroeconomic variables. By considering these overlooked aspects, we demonstrate that there is an inherent cyclical motion in collective variables, transactions, and expectations within an economic domain composed of continuous numeric risk grades. This cyclical motion is responsible for observed business cycles but has been largely disregarded in traditional economic analyses. Our findings emphasize the need to incorporate these unnoticed and overlooked factors into theoretical economics and policy decisions. By doing so, we open up a wide field for further studies by academic researchers, economists authorities, high-level politicians, and policymakers. Understanding these hidden dynamics will contribute to more accurate assessments of economic realities and enable more effective policy interventions to address challenges in our complex global economy.
- Economic theories and policies are ideas and plans that help us understand and make decisions about money and how it affects our lives.
- Sometimes, these theories only focus on a small part of the things that affect the economy, leaving out important factors.
- This study looks at those missing factors to better understand how the economy works in real life.
- It focuses on things like how people work together, the risks involved, and how fast things change in the economy.
- These factors have been ignored before, but they are really important for understanding how economies grow and change.
Definitions
- Accuracy: How correct or true something is.
- Effectiveness: How well something works or achieves its goals.
- Variables: Different things that can change or affect a situation.
- Processes: The steps or actions that happen to make something work or happen.
- Dynamics: How things change or move over time.
- Unnoticed: Not noticed or paid attention to before.
- Overlooked: Not seen or considered as important before.
- Collective: When people work together as a group towards a common goal.
- Transactions: When people buy or sell goods or services with each other.
- Expectations: What people think will happen in the future based on what they know now.
- Mean risks: The average level of uncertainty or danger involved in something.
- Velocities: How fast something moves or changes direction
- Flows: How much of something moves from one place to another -
Unnoted Factors that Influence Economic Dynamics
The accuracy and effectiveness of economic theories and policies are heavily influenced by the selection of economic variables and processes used to describe economic reality. This poses a challenge in assessing which variables and processes are responsible for driving economic evolution. The existing economic theories only capture a small fraction of the factors that contribute to economic dynamics, leaving numerous important variables and processes unnoticed or overlooked. In this study, we explore these unnoted factors that play a significant role in determining the states and predictions of real economics.
Collective Economic Variables
We specifically focus on collective economic variables, collective transactions and expectations, mean risks of economic variables and transactions, as well as collective velocities and flows of economic variables, transactions, and expectations. These factors have been largely ignored in current economic theories but are crucial for understanding the evolution of economies.
Market-Based Probability
Additionally, we introduce the concept of market-based probability of asset prices and highlight the unnoticed influence of market stochasticity on the randomness of macroeconomic variables. By considering these overlooked aspects, we demonstrate that there is an inherent cyclical motion in collective variables, transactions, and expectations within an economy composed of continuous numeric risk grades.
Business Cycles
This cyclical motion is responsible for observed business cycles but has been largely disregarded in traditional economic analyses. Our findings emphasize the need to incorporate these unnoticed and overlooked factors into theoretical economics and policy decisions. By doing so, we open up a wide field for further studies by academic researchers, economists authorities, high-level politicians,and policymakers.
Complex Global Economy
Understanding these hidden dynamics will contribute to more accurate assessments of economic realitiesand enable more effective policy interventions to address challenges in our complex global economy
Accuracy of economic theories and efficiency of economic policy strictly depend on the choice of the economic variables and processes mostly liable for description of economic reality. That states the general problem of assessment of any possible economic variables and processes chargeable for economic evolution. We show that economic variables and processes described by current economic theories constitute only a negligible fraction of factors responsible for economic dynamics. We consider numerous unnoted economic variables and overlooked economic processes those determine the states and predictions of the real economics. We regard collective economic variables, collective transactions and expectations, mean risks of economic variables and transactions, collective velocities and flows of economic variables, transactions and expectations as overlooked factors of economic evolution. We introduce market-based probability of the asset price and consider unnoticed influence of market stochasticity on randomness of macroeconomic variables. We introduce economic domain composed by continuous numeric risk grades and outline that the bounds of the economic domain result in unnoticed inherent cyclical motion of collective variables, transactions and expectations those are responsible for observed business cycles. Our treatment of unnoticed and overlooked factors of theoretical economics and policy decisions preserves a wide field of studies for many decades for academic researchers, economic authorities and high-level politicians.
