Circular Organization of Economic Processes: Symmetric Model of Economic Equilibrium

Leiashvily, Paata (2025): Circular Organization of Economic Processes: Symmetric Model of Economic Equilibrium. Published in: Journal of Economics & Management Research , Vol. 6, No. 10 (15 October 2025): pp. 1-9.

Abstract

On the basis of dialectical analysis of basic economic categories a new understanding of economic value, price formation and general equilibrium has been proposed. Market economy appears as the form of a complex, non-linear, functionally closed and causally open system of economic actions. Such systems have a number of unique properties that are well studied by second-order cybernetics. The self-organization of a market economy is carried out through the recursive processes. Recursive processes in the economic system, as well as in other complex nonlinear dynamical systems, generate "eigenvalues" ("fixed points"). These "eigenvalues" are the equilibrium prices and quantities of goods to which through the recursive processes tend the actual prices and quantities, thus providing a tendency to the general equilibrium. However, due to constant influence on the system of random external factors, the general equilibrium is never achieved. On the base of created model the hidden relationships among the gross profit, gross saving, gross investment and gross consumption in debt, as well as the relationships among the other economic parameters are revealed.

• Item Type: MPRA Paper
• Language: English
• Keywords: methodology, general economic equilibrium, value, pricing, utility, costs, production, consumption, profit, saving, investment
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B41 - Economic Methodology; D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D50 - General; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth

References

1. Stiglitz J (2012) The Price of Inequality: How Today's Divided Society Endangers Our Future. https://business.columbia.edu/ sites/default/files-efs/imce-uploads/Joseph_Stiglitz/Price%20 of%20Inequality%20for%20Sustainable%20Humanity.pdf

2. Marx K, Engels F (1955) Works https://www.hekmatist.com/ Marx%20Engles/Marx%20&%20Engels%20Collected%20 Works%20Volume%2012_%20M%20-%20Karl%20Marx. pdf.

3. Leiashvily P (2023) The Economy as a Complex System of Economic Actions: In Search of a New Paradigm. Nova Science Publishers Inc DOI: https://doi.org/10.52305/ cusk3471.

4. Leiashvily P (2012) Economic Activity: Teleological Analysis. Nova Science Publishers Inc https://www.amazon. com/Economic-Activity-Teleological-Analysis-Political/ dp/1619429403.

5. Hegel F (2010) Encyclopaedia of the Philosophical Sciences in Basic Outline. https://www.marxists.org/reference/archive/ hegel/works/ol/encycind.htm.

6. Walras L (2000) Elements of Pure Economics. Moscow, "Izograf”, 2000, (in Russian).

7. Marx K (1978) Capital. https://www.marxists.org/archive/ marx/works/download/pdf/Capital-Volume-I.pdf.

8. Steedman I (1981) Ricardo, Marx, Sraffa. In: I. Steedman, P. Sweezy and others, The Value Controversy. London. Verso Editions and NLB : 11-19.

9. Leiashvily P (1996) Towards the teleological understanding of economic value. International Journal of Social Economics 23: 4-14.

10. Leiashvily P (2015) Self-regulation of Market Economy: Interdisciplinary Analysis. NY Nova Science Publishers Inc https://novapublishers.com/shop/self-regulation-of-market�economy-interdisciplinary-analysis/.

11. Leiashvily P (2017) The Relativity Theory of General Economic Equilibrium. American Journal of Economics 7: 216-229.

12. Foerster H (2003) Understanding Understanding: Essays on Cybernetics and Cognition. https://www.alice.id.tue.nl/ references/foerster-2003.pdf.