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Does a similar (perhaps probabilistic) concept exist within finance/economics?
Probably not, but I’m not really sure what you’re asking? What do you want this concept to do?
- do you want to know where people will migrate to?
- do you want to know how people will sort themselves based on some feature they possess?
Economist here. Probably not, but I’m not really sure what you’re asking? What do you want this concept to do? - do you want to know where people will migrate to? - do you want to know how people will sort themselves based on some feature they possess?
I think it was this HN discussion[1] of housing prices that led me to wonder about this; I considered commenting there but it could've seemed like an obscure tangent.
It seems unsustainable societally for housing prices to continue to rise long-term, and I'm wondering if there is a way to graphically represent the state of the market and the players involved, in order to first of all understand the situation, and then to communicate what is going on to a variety of different audiences.
In a geological drainage basin, gravity is the constant. Not sure what is analogous in economics besides the obvious “money” but there are plenty of outliers to point out there whereas gravity doesn’t have as many.
Georgism posits as a general principle that a lot of money is captured as land rent.
Regardless of what you do for a living we're all human and those two are major expenditures for 100% of the population.
I can't explain it but in my mind its sort of a map like the Collatz conjecture where you end up in a loop somewhere that always ends up being food, somewhere down the line.
I remember reading an article about how a large proportion of tech venture capital ultimately makes its way into the pockets of Silicon Valley landlords. Georgism posits as a general principle that a lot of money is captured as land rent.
(separately: perhaps Georgism would require some upgrades for today's digital economy where land isn't necessarily required for production)
Hydrology and economics both have stock/flow models. I don't know much of anything about hydrology, but you seem to be describing a directed acyclic graph with multiple sinks (i.e. nodes with no outgoing edges, "drainage basins"). The full water cycle is not explicitly modeled; there is no "edge" from a drainage basin to the atmosphere, and from the atmosphere back to the ground, to create a cycle.
In economics, there are many models of cyclical flows of commodities or money (acylic graphs are a special case of limited interest, as far as I know). Historically, the physiocrats were among the first to propose one (the "Tableau Economique"), to support their doctrine that the growth of national wealth was limited by agricultural output (which was, to a first approximation, true in their time).
The descendants of the Tableau are Leontief input-output models, which form the basis of national accounts (from which we get concepts like Gross Domestic Product). You can calculate the "leontief inverse" of an input-output matrix that lets you characterize how coupled different firms or sectors are in a given economy. Under assumptions of linear technology, these let you answer questions like: "How much would the total output, in dollars, of the steel sector have to increase to increase the total output of the automobile sector by $10 million dollars, relative to last year?"
If a sectors or firm has a relatively large multiplier, it means that it has a greater impact on the whole economic system than those with a smaller multiplier. When you hear claims like "building this factory would indirectly create 10k jobs", it is usually based on a regional input output model commissioned by a lobbying group or government agency.
I'm dimly aware these techniques have been used to model the diffusion of inflation from sector to sector, but I believe the state of the art involves convex optimization techniques that are beyond my ken.