Our Simulation Methods:
Economic models are developed as an electrical equivalent model. For example, a person adding money to a savings account at the rate of $1,000.00 per month is modeled as a 1,000.00 milliamp current flowing into a capacitor. This same person making a withdraw from the savings is modeled as an equivalent current flowing out of the capacitor. The resulting mathematics and simulation results are the same for the two views. Every economic situation has an electrical equivalent.By using a few simple electrical components, complex economic models are developed. For example, we have developed and tested models of industry, banks, government, and labor. After testing these models individually, they are combined to model the economy. These models are then used to evaluate the effect that economic decisions have on the economy.
Our Simulation Tools:
To solve complex economic and financial problems we use software simulations tools (SPICE) that had their origin at the University of California at Berkeley. These tools were originally developed for the simulations of complex Integrated Circuits.These tools and more advanced commercial versions have been used for decades by the electronics industry and are well proven.
These tools are adapted for the simulation of very complex economic and financial problems.
Simulation Tutorials:
For maximum benefit, please investigate the following links in sequence.
Overview of economic simulations
Electrical components used in economic simulations
Modeling interest rate
Example1 (Alice's Loan Payment)
Example2 (Alice's Loan Payment Option 2)
Example3 (Joe's Retirement)
Example4 (Modeling Bank Reserve Requirement)
Learn Electronics
Tutorial Videos:
The SPICE Circuit Simulator:Financial & Economic Analysis using Circuits:
Electrical Model of a Savings Account Using LT-SPICE:
Electrical Model of Interest Rate:
Model of Alice's Loan Payment Using LT-SPICE:
Model of Joe's Retirement Savings Using LT-SPICE:
Model of Banking Reserve Requirement Using LT-SPICE:
Simulating the Economy Using SPICE: