[Graph logo] AK and AL: NelWin and Knowledge-Labour modelling

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The project

The Lsd implementation of both the AK Nelson-Winter models and the AL knowledge-labour models is a part of a project called DRUIDIC, an acronym that means Dynamical Reconstruction of Unfolding Industrial Diversity by Interactive Computing. This acronym is obviously playing on the fact that DRUIDIC is related to DRUID, the Danish Research Unit for Industrial Dynamics.

The project goes back to 1995 and its evolutionary models were originally programmed in the language of Maple, a standard package designed for symbolic mathematics. The choice of Maple had not only advantages (a powerful language, a huge mathematical library, etc.) but also highly constraining disadvantages (slowness in numerical computation, dependence on the commercial Maple program, etc.). Therefore, the DRUIDIC models are being transferred to Lsd.

The family of evolutionary models implemented in Lsd

The DRUIDIC models starts from a reconstruction of the Nelson-Winter models (here called the AK models). But the further work is not built directly on AK, since they exclude its physical capital part. Instead we have knowledge-labour models of economic evolution (the AL model family). The AL models are extensions of the pure-labour Nelson--Winter-like model, which was proposed in Andersen's (2001a) contribution to the Nelson--Winter Conference organised by DRUID. In Andersen's paper the ancestor of the present AL models was called the LNW model (the Labour Nelson-Winter model), but that name is not optimal. The idea is not to conserve but to first to simplify and then to develop ideas of Nelson and Winter as well as other evolutionary researchers. Furthermore, the core issue is that of knowledge rather than "raw" labour. For these reasons the present report will talk about AL models even in cases where they are identical to the LNW model.

In contrast to the standard AK Nelson-Winter model, the AL models leaves out physical capital and concentrates on the basic production factors: knowledge, production labour that produce output by means of knowledge, and research labour (including parts of production activities) that improves the stock of knowledge. This design has sigificant consequences on how economic problems are considered: basically, they become problems of the division and coordination of labour (both productive and innovative). To explore systematically these problems is a huge task, and in this respect present AL models should be considered as a strategically chosen starting point. For instance, the simplest version of an AL model will be extended with an explicit treatment of the decisions of employees and households. Another priority is to incluse the emergence of a multisectoral economy with exchange of intermediate goods between multiactivity AL-like firms.

The Lsd implementation of the AL model family has several purposes:

  1. The simulation models are designed to be a teaching and self-learning tool about evolutionary processes, e.g. by allowing a gradual extension of the complexity of the studied problems.
  2. The simplicity and extendibility of the basic AL model suggest that it may function as a standard against which several types of research-oriented models can be compared; here the foundation of this basic AL model in the analytical results of pure replicator dynamics is of major importance.
  3. The AL models are really a fairly large family of models that, at least in principle, can be easily extended to cover a wide range of topics (which e.g. have been discussed in several of Andersen's papers; see the references).
    • AL Mark 2: The present version includes individual employees and households, and this is just the beginning of a treatment of many issues relating to demand and to the labour market.
    • AL Mark 3a: Here the production and research of each firm covers not only final output but also intermediate goods and markets for intermediate goods can emerge, so we have a multisectoral AL model family with wide perspectives.
    • AL Mark 3b: Later there will be an extension to the production of an increasing range of goods for the household sector, as it has already been implemented in Maple.

Using and developing the DRUIDIC models

While both the basic AL model and its present extensions are basically simple, the Lsd implementation of them contains a fairly large number of features. To use the AL models for meaningful simulations, you have to understand (1) the basic AL model, (2) the basics of the Lsd user interface, (3) the names and meaning of the main AL variables and parameters, and (4) how to work with the control parameters of the AL system. It is also useful to have some understanding of the underlying modelling philosophy.

Information of these topics is found in several files that are distributed together with the AL simulation application. Most of these files have been integrated in a fairly extensive help and documentation system that can be inspected through a web browser. In the directory of each DRUIDIC model there is e.g. a description file, a file recording the changes (so that is it easy to see the new features of an update), an extensively commented Lsd equation file (fun_AL2.cpp), etc. A commented list of the contents of each directory is found in the readme.txt file.

It is obvious that the use of the DRUIDIC models presupposes an elementary knowledge about the Lsd system, which e.g. can be obtained in a couple of hours by means of the first two Lsd tutorials from the Help menu of the Lsd Model Manager. This might be sufficient to perform the premade exercises that are described in the tutorials file.



Lsd is a system for developing and compiling simulation models as stand-alone application as well as a system for exploring model applications without any knowledge of programming. Lsd is developed and maintained by Marco Valente. The ordinary Lsd web site includes manuals and downloads. The present web pages includes additional Lsd-related materials and downloads. It is not necessarily in sync with the latest Lsd version.
 

Maintained by Esben Sloth Andersen, email: esa@business.aau.dk.
Revision: 09 August 2004, 13:35.