I was looking at yet another economist problem, hiring workers who later leave. What is the best way to model this.
An input queue and an output queue.
The
firm has a queue of workers leaving and people entering. Thwe firm has a
rule, there should be one more person in the input queue than the
output queue, that way it never has a shortage. It can change the
arrival rate in and out by raising or lowering wages.
What is the equilibrium? Poisson queue where mean equals variance. so, using deviation, I (inout) and O (output), we get:
I^2-O^2 = 1
And waddya know, the hyperbolic condition. I and O are functions of
wages paid. This conserves labor and so works in finite systems.
If you want some slack, let the input queue grow and the constant on the right become larger than one, more liquidity.
Labor is conserved, the condition meets not just the envelope theorm
but meets Ito's calculus, so the economist can compute the probability
distribution of labor over firms. This also connects wages across firms
because at equilibrium the input and output rates will segregate the
variances up to the optimum overlap. determined by the selected
precision of the overall labor market.
It is time for the economist to move on to complete, Ito compatible,
likelihood macro models. Leave time out of the system, use relative
rates. Find equilibrium, then go and time the hiring process with some
real firms and you can add time back in.
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