Affiliations: International Center for Cognitive Informatics (ICfCI),
Theoretical and Empirical Software Engineering Research Centre (TESERC), Dept.
of Electrical and Computer Engineering, Schulich School of Engineering,
University of Calgary, 2500 University Drive, NW, Calgary, Alberta, Canada T2N
1N4. [email protected]
Note: [] Address for correspondence: Schulich School of Engineering,
University of Calgary, 2500 University Drive, NW, Calgary, Alberta, Canada T2N
1N4
Abstract: Many fundamental theories and doctrines of micro- and
macro-economics are not formally studied in economics. This paper presents a
rigorous treatment and explanation of a set of fundamental empirical theories
of economics. It is recognized that the adaptive equilibrium of market systems
is rooted in the negative feedbackmechanisms of demands and supplies. A
mathematical model of economic equilibrium developed in this paper provides a
formal proof of Adam Smith's hypothesis of the
'invisible hand'. An economic equilibrium theorem is
derived to deal with more complicated multivariable equilibrium problems that
could not be handled in conventional economic theories. Then, a set of
mathematical models is developed for dynamic cost analyses and the estimation
of economical outcomes of engineering projects.
Keywords: Theoretical economics, mathematics models, formal explanation, the invisible hand, equilibrium models, engineering economic analyses, complex economic systems
