From: John Conover <firstname.lastname@example.org>
Subject: Re: Proposal for new "engineer.sci.economics"
Date: 30 Aug 1999 20:10:44 -0000
Dan Parker writes: > email@example.com wrote: > > > Dan Parker writes: > > > firstname.lastname@example.org wrote: > > > > > > > email@example.com writes: > > > > > On 28 Aug 1999 21:24:14 GMT, firstname.lastname@example.org (George) wrote: > > > > > > > > > > >I get the distinct impression that formally trained economists do not like > > > > > >engineers coming into their field. > > > > > > > > > > I wonder what an engineer would think of an economist telling them how > > > > > to build a bridge? > > > > > > > I wonder what an economist would think about Markov/Wiener telling > > > > them about high entropy processes. > > > > > > There was a discussion on this list not so long ago about entropy, > > > and the research I did seems to suggest scientific entropy (as opposed > > > to metaphorical entropy), is not a significant issue in human production > > > activities. The sun is held to create so much entropy, that our efforts > > > do not measurably impact the total amount. Greenhouse gases were > > > shown to be not entropy, but pollution that blocked entropy from > > > escaping into space. > > > > > > > Oh, Dan, I was referring to information entropy, a la Claude Shannon, > > from the information-theoretic disciplines. > > > > The entropy of the time series of a stock's value, or a nation's GDP, > > has very high entropy, or uncertainty. > > > > So, it is difficult to reconcile the concepts of macroeconomics with > > high entropy systems-how could economists be certain? > > Sounds like the same trouble Prigogine is have with his > entropy predictive work, in that the butterfly effect makes > the thing useless. I think much of the uncertainty of current > economics is a case of something moving at another level > than entropy, but nevermind. The following is a snip on some > economics done on the information aspect of entropy in any case. > Hi Dan. Yea, but it does raise an epistemological issue in the profession of economics: is prediction, (in high entropy systems, like the GDP, for example,) even possible at all? If not, are we fooling ourselves with the grand concepts and equations of macroeconomics where we attempt to do so? John BTW, note that the butterfly effect implies only that long term, (whatever that term means,) prediction is impossible-there is a short term horizon of predictability, but beyond that, things degenerate into a 50/50 crap shoot. Kind of like the weather. It is not clear whether a national GDP is such a system-it might be just stochastic. But then, if it is stochastic, one could make the statement that the function of macroeconomics is to ascertain-through inductive rationality-the Nash equilibrium of the system, and base state equations on that. -- John Conover, email@example.com, http://www.johncon.com/