Macroeconomic calculations using water

On the New York Times website, there is a column about a water-based analog computer that was used to model the economy back in the 1950s:

Water flows through a series of clear pipes, mimicking the way that money flows through the economy. It lets you see (literally) what would happen if you lower tax rates or increase the money supply or whatever; just open a valve here or pull a lever there and the machine sloshes away, showing in real time how the water levels rise and fall in various tanks representing the growth in personal savings, tax revenue, and so on.

It’s both clever and amusing. Certainly, operating such a machine would have been less tedious than doing all the calculations with a pencil and paper. There is a video of the machine working on Cambridge University’s website.

Author: Milan

In the spring of 2005, I graduated from the University of British Columbia with a degree in International Relations and a general focus in the area of environmental politics. In the fall of 2005, I began reading for an M.Phil in IR at Wadham College, Oxford. Outside school, I am very interested in photography, writing, and the outdoors. I am writing this blog to keep in touch with friends and family around the world, provide a more personal view of graduate student life in Oxford, and pass on some lessons I've learned here.

One thought on “Macroeconomic calculations using water”

  1. Science reinvents the economy: An economy in a computer
    08 June 2009

    Can we pack an entire economy, with all its complex human and political interactions, into a computer? Physicist Dirk Helbing of ETH thinks so – as long as we’re bold enough in going about it.

    He points out that financial systems aren’t the only monsters we’ve let out of the box. How traffic flows in and around huge cities simply cannot be grasped by mathematical analysis, but computer models let millions of virtual vehicles interact on realistic road patterns – and often discover potential problems before they occur in reality.

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