Economic Applications
There are many natural applications of hyperbolic coordinates in economics:
- Analysis of currency exchange rate fluctuation:
The unit currency sets . The price currency corresponds to . For
we find, a positive hyperbolic angle. For a fluctuation take a new price
- .
Then the change in u is:
- .
Quantifying exchange rate fluctuation through hyperbolic angle provides an objective, symmetric, and consistent measure. The quantity is the length of the left-right shift in the hyperbolic motion view of the currency fluctuation.
- Analysis of inflation or deflation of prices of a basket of consumer goods.
- Quantification of change in marketshare in duopoly.
- Corporate stock splits versus stock buy-back.
Read more about this topic: Hyperbolic Coordinates
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