< I have no recollection or record of saying this,
and economic models are most certainly "non-linear". >
VERY SORRY; I should have been more discriminating
before making such a silly statement!
The thread was "Great Filter, Low Profile,
Cryptocosmology" and I asked "What would economists
call the type of mechanisms (for trying to modulate
chaotic systems, rather than eliminate them)", trying
to get some idea of the scope of what Robin meant by
"Mechanism Design" and "signaling games" and whether
these had any application to chaotic systems.
On Tuesday, October 22, 1996 1:31 PM Robin Hanson
replied:
< Economists don't focus much on systems described by
differential equations in time. So they don't have a
snappy name for it. >
Now, if I was a Fortune 500 executive and you were
briefing me and said something like that, I would
probably send you back to your campus and go hire
someone like Michael Rothschild who could speak my
language (of course, I'd likely be making a big
mistake ;-)
This relates to another thread, that I noticed while
digging up the above reference, where Robin was
wondering why people accept advice from computer
salespeople but not from economists or other social
scientists.
I mentioned Paul Romer's New Growth theories and
Robin replied:
< Romer's work is solidly within the standard
"equilibrium thinking" framework. (In economics,
equilibrium doesn't mean statis.) >
I'm sure it is, and ideas of endogenous growth
complement Krugman's work on 'free trade'.
I guess, then, that most political scientists today
would not agree with the concluding paragraph of
Friedrich Hayek's 1945 essay "The Use of Knowledge in
Society" where he warns:
"Any approach, such as that of much of mathematical
economics with its simultaneous equations, which in
effect starts from the assumption that people's
knowledge corresponds with the objective facts of the
situation, systematically leaves out what is our main
task to explain. I am far from denying that in our
system equilibrium analysis has a useful function to
perform. But when it comes to the point where it
misleads some of our leading thinkers into believing
that the situation which it describes has direct
relevance to the solution of practical problems, it
is high time that we remember that it does not deal
with the social process at all and that it is no more
than a useful preliminary to the study of the main
problem."
Mark Crosby
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