Equilibrium Flow Equation for Economic System Modeling

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Solution Overview

Problem

Measurement and modeling of economic systems are challenging due to complex theoretical concepts that are abstract and difficult to comprehend, particularly in explaining relationships between variables like revenue, expenses, assets, liabilities, and equity.

Innovation Solution

A method using an equilibrium flow equation (I + ∑Eo = AL + Eq) to analyze and predict the impact of changes in economic variables, allowing for the analysis of both closed and open economic systems, and providing a clear, mathematical representation of their relationships.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Adaptability or versatility

If traditional theoretical economic concepts are used to explain economic systems, then comprehensive economic relationships can be covered, but the concepts become abstract and difficult to comprehend

Engineering Contradiction:

Improvecomprehensive economic relationshipsVSAvoidcomprehensibility

Core Design Contradiction:

Adaptability or versatilityVSEase of operation

Solution Approach 1:

The patent replaces traditional verbal and theoretical economic explanations with a mathematical framework using differential equations and flow diagrams. This substitution transforms abstract economic concepts into concrete mathematical relationships that are more objectively comprehensible while maintaining comprehensive coverage of economic relationships between variables such as revenue, expenses, assets, liabilities, and equity.

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

2Loss of information

If mathematical equations are used to describe economic relationships, then clarity and objectivity are improved, but the complexity of the mathematical model increases

Engineering Contradiction:

Improveclarity and objectivityVSAvoidmathematical model complexity

Core Design Contradiction:

Loss of informationVSDevice complexity

Solution Approach 1:

The patent segments the economic system into distinct components (revenue, expenses, assets, liabilities, equity) and represents their relationships through a series of interconnected mathematical equations and flow diagrams. This segmentation allows complex economic relationships to be broken down into manageable, analyzable parts while maintaining overall system clarity through the unified equilibrium flow framework.

Inventive Principle:

Principle #1Segmentation

3Reliability

If traditional economic modeling methods are used, then theoretical depth can be achieved, but measurement precision and direct observation of variable relationships are reduced

Engineering Contradiction:

Improvetheoretical depthVSAvoidvariable relationship measurement

Core Design Contradiction:

ReliabilityVSMeasurement precision

Solution Approach 1:

The patent incorporates feedback mechanisms through its equilibrium flow equations, where changes in one economic variable automatically propagate through the system to affect other variables. The differential equations continuously adjust variable relationships based on equilibrium conditions, providing both theoretical depth and precise measurement of how changes in revenue, expenses, assets, liabilities, or equity directly impact the overall economic system.

Inventive Principle:

Principle #23Feedback

Data Source

PatentUS7827095B2Equilibrium flow between economic systems

Publication Date: 2010.11.02 NGUYEN TIM HUNG MINH

AI summary

Computer implemented methods and systems are provided for analyzing equilibrium flow within economic system. Related systems, apparatus, methods, and/or articles are also described.