From Traffic Flow to Economic System

The optimal velocity model which is applied to traffic flow phenomena explains a spontaneous formation of traffic congestion. We discuss why the model works well in describing both free-flow and congested flow states in a unified way. The essential ingredient is that our model takes account of a sort of time delay in reacting to a given stimulus. This causes instability of many-body system, and yields a kind of phase transition above a certain critical density. Especially there appears a limit cycle on the phase space along which individual vehicle moves, and they show cyclic behavior. Once that we recognize the mechanism the same idea can be applied to a variety of phenomena which show cyclic behavior observed in many-body systems. As an example of such applications, we investigate business cycles commonly observed in economic system. We further discuss a possible origin of a kind of cyclic behavior observed in climate change.