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

Authors

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