MONIAC for the 21st Century

Plain-language explainer for doi:10.5281/zenodo.20679006 (#409)

The central idea in one sentence

EconIAC is to the economy what MONIAC was in 1949 — a working physical model that enforces conservation laws — except it runs on mathematics (gauge theory, sheaf cohomology, automatic differentiation) instead of hydraulics.

What MONIAC was

In 1949, the economist Bill Phillips built MONIAC: a hydraulic computer modelling the British economy as tanks, pipes, and valves. Coloured water represented money flows. Conservation was enforced physically — what flowed in had to flow out. It correctly predicted macroeconomic dynamics.

EconIAC does the same with modern mathematics:

  • Conservation is enforced by the Pacioli identity (double-entry accounting = gauge invariance)
  • Flows are connections on the Pacioli manifold
  • Arbitrage is curvature (non-zero holonomy)
  • Systemic risk is sheaf cohomology ($H^0 / H^1 / H^2$)
  • Gradients are computed by JAX automatic differentiation

What this paper is

Paper 409 is the overview and reading guide for the entire EconIAC programme — 19 published economics papers, mapped and explained. It answers:

  • What is EconIAC and why does the mathematics matter?
  • Which paper should I read first for my specific interest?
  • What does the code do and how do I install it?

Four reader tracks are provided: gauge theory foundations, cohomological risk, climate applications, and financial derivatives.

The three mathematical foundations

Foundation What it does Key paper
Gauge theory Conservation, arbitrage as curvature, exchange rates as parallel transport Paper 291
Thermodynamics Bounded rationality as Gibbs distribution; differentiable Shapley values Paper 289
Sheaf cohomology H⁰/H¹/H² risk hierarchy; 2008 crisis as topological event Paper 397

For the full technical treatment, see doi:10.5281/zenodo.20679006