A Qualitative Simulation Method Based On Sign Confluence With Application

In this paper, a technology of qualitative simulation is presented and applied tomacroeconomic analysis. Qualitative simulation methods are widely applied in theworld, but its application in the economic area is still preliminary.The major limitations of the three famous basic methods of qualitative reasoningare presented, e.g. irreversibility of adding in De Kleer's method, "close world"rigidity of Forbus' method, explosive reasoning branches of Kuipers' method. Themethod of qualitative simulation in this paper is based on De Kleer's method. It iscombined with Williams' theory and overcomes the defect of De Kleer's method. Sothis qualitative simulation method based on sign confluence is much stronger in thetheory. The rules of its operation are more complete. The solving of the signconfluence equation is just as the solving of the ordinary differential equation.In this paper, many conclusions which already exist in the macroeconomicanalysis in the west economics are used for reference, such as product marketequilibrium IS model (relationships between income and interest rate), money marketequilibrium LM model (relationships between income, interest rate, price and money),aggregate demand-aggregate supply equilibrium model (relationships betweenincome and price), etc. Qualitative simulation method based on sign confluence isapplied, sign confluence models are constructed, solved by using excluding methodor qualitative resolution method, and causal explanation is derived. By solution, it isintuitive that the change of aggregate demand-aggregate supply and price isinfluenced by any of the following factors: i. change of government expanditure, ii.change of money supply, iii. change of full employment, iv. change of technicalprogress. Thus we have the following conclusions: (1) qualitative simulation based onsign confluence model can react to the above factors rapidly, conveniently and fully,deriving change of aggregate demand-aggregate supply and price promptly. (2) themethod is easy and convenient for model construction, easy and time saving forsolving.Object oriented method is used in the analysis and design of qualitativesimulation system based on sign confluence. The method is implemented with c#programming language. Qualitative variable class etc. are defined and adding andmultiplying operators are overloaded. Sign confluence is solved with excludingmethod in the system.For certain topic in economic area, using qualitative simulation method based onsign confluence, building and solving sign confluence and deriving causalexplanation, the process is suitable for the qualitative characteristics ofmacroeconomic analysis and easier, more rapid, intuitive and cost saving thanquantitative simulation.