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Creating Economic Model

Creating Economic Model, 28 Steps
by Dr. Bob Reuschlein
#1 Bar chart from Ruth Sivard found, military vs manufacturing productivity
#2 Graph the bar chart
#3 Correlate raw data
#4 Drop one country and correlate again
#5 Weighted average three continents and correlate r = -0.997
#6 After perfect cross continent proof, look for long term model in leading economic country US
#7 Graph economic growth rate plus military spending
#8 Recognize deficit offsets military spending to explain World War II
#9 Recognize Kondratiev Wave explains the fifties
#10 Recognize manufacturing productivity explains better than economic growth
#11 Look to establish parameters for long term US model
#12 Use a variety of multi year moving averages to locate peaks and troughs over time
#13 Use formula given by a friend when peak to trough and trough to peak matches that formula
#14 Know that the answer to all differential equations is a sine wave
#15 Compute amplitude of sine wave using peak and trough of economic growth wave
#16 Compute values each year and compare to actual values
#17 When annual comparisons show differences, compute running total of variations over time
#18 Note that running total approaches zero periodically
#19 Consult Encyclopedia Britannica on economic cycles
#20 Note that periodic perfection of running total error follows Juglar 8 to 10 year cycle
#21 Note that model drops to 7.0 lower rate during Great Depression
#22 Note that model drops 3.7 lower rate during seventies Oil Crisis
#23 Note that down periods perfect out at lower level every three years or so.
#24 Note that down periods just mentioned return to normal after about a decade
#25 Note that starting period 1920 to 1922 requires using a three year average for the 1921 year
#26 Note that 1939 to 1947 data gap fills smoothly with no productivity gain for the four war years and average productivity assumed for the years 1940, 1941, and 1946
#27 Note the linear reduction in total model volatility in six successive Juglar cycles from the twenties to the eighties.
#28 Note that model was extended for another thirteen years with similar accuracy r = .999

Full eleven page explanation of this process including numbers used:

Dr. Peace, Dr. Bob Reuschlein, Real Economy Institute
best contact to ask Bob to speak to your group:
to leave message: 608-230-6640
for more info:
(Real Economy and/or Peace Economics free pdf on request by members of the press)


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