Macroeconomic 'Action-at-a-Distance', Economic Fields and Surface Waves

This paper describes macroeconomic surface-like waves on economic space. We model macroeconomics as ensemble of economic agents and use their risk ratings as coordinates on economic space. Aggregates of agent's economic variables at point x define macroeconomic variables as functions of x on economic space. Evolution of macroeconomic variables like Investment, GDP, Demand, Credits and etc., is determined by economic and financial transactions between economic agents. Aggregates of transactions between agents at point x and y determine functions of two variables (x,y) on economic space. Such transactions can describe amount of Credits provided from agents at point x to agents at y and thus amount of Loans received by agents at y from agents at x. Economic agents fill macroeconomic area with borders defined by minimum and maximum risk ratings or most secure and most risky agents. Economic and financial shocks can disturb steady borders of macroeconomic area and cause perturbations of transactions. Such disturbances can generate waves that propagate along macroeconomic borders alike to surface waves in fluids. We describe model interactions between two transactions by hydrodynamic like equations in a closed form. We introduce notions of “economic accelerations” and their potentials that establish steady state distributions of macro transactions on economic space. For this model in linear approximation we describe surface-like waves and show that perturbations induced by surface-like waves can exponentially grow up inside macro domain and induce instabilities in a low risk area. Description of steady state distributions of macro transactions and surface-like waves on economic space might be important for macroeconomic modeling and forecasting