Without a proper modelling of state DGSE is simply mathematically flawed, and to dismiss mathematically correct approaches as ‘physics envy’ displays a basic error of understanding what is necessary to correctly model ANY dynamic system using the fundamental principles of applied mathematics. Noah needs to get some Maths Envy.
If we correctly model state then we need correct modelling of all factor incomes and investments in future income streams that will yield factor incomes. Only then will the model be both microeconomically and macroeconomically consistent. But you have to do both together, at the same time, and only then will you be able to avoid the lucas critique. The approach that macroeconomics must be microfounded is the wrong way to approach this, it makes the most basic error in all of the social sciences, trying to collapse structure into agency.
Decisions, Decisions, Decisions
@Noahopinion @Profstevekeen The Problem is ‘Maths Envy’ Not ‘Physics Envy’ in Supplanting DGSE
Andrew Lainton | Consultant (UK)
1 comment:
What on earth is Andrew Lainton talking about? Tom, can you translate it into English?
Post a Comment