Investigation of fundamental cycles of economic activity and rebate time in winner-take-all systems

Authors

Maria Teresa R. Pulido ⋅ PH National Institute of Physics, University of the Philippines Diliman
Christopher P. Monterola ⋅ PH National Institute of Physics, University of the Philippines Diliman
Caesar A. Saloma ⋅ PH National Institute of Physics, University of the Philippines Diliman

Abstract

We investigate the emergence of fundamental economic cycles of activity and rebate time with the introduction of taxes in winner-take-all systems. For systems with time-dependent rebates, which are distributed after a fixed period, economic activity and rebate time are found to be independent of initial income distribution and the fraction P_tax to be taxed per transaction. However, when the rebates are threshold-dependent, such that they are distributed when the accumulated tax reaches a particular fraction P_rebate of the remaining wealth within a population, a tradeoff was determined between the fraction to be taxed and the threshold fraction of the remaining wealth. For the P_tax = 15% corresponding to real economic systems, the practice of distributing rebates according to a threshold contributes to significantly greater economic activity than when rebates are regularly distributed after a year or 260 (working days). Economic activity is optimal for higher values of P_tax and lower values of P_rebate, while rebate time is independent of initial income distribution and population or wealth growth.

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Issue

2003: Proceedings of the 21st Samahang Pisika ng Pilipinas Physics Congress

Article ID

SPP-2003-3D-05

Section

Computational Physics

Published

2003-10-22

How to Cite

[1]

MTR Pulido, CP Monterola, and CA Saloma, Investigation of fundamental cycles of economic activity and rebate time in winner-take-all systems, Proceedings of the Samahang Pisika ng Pilipinas 21, SPP-2003-3D-05 (2003). URL: https://proceedings.spp-online.org/article/view/SPP-2003-3D-05.