I had a look at the conference – looked like a great program and wish I’d heard about it earlier. Are the presentations from the conference going to be made available do you know?

Cheers
Ben

Your explanations clear up my query on how mathematics impact on economics. The key for success seems to be in the validity of the model and the need for reality checks along the way. Likening the model to a skeleton and behavioural dynamics to the muscles is an excellent way to describe the process. I also appreciate your views on the importance of the time element and your emphasis on studying economic history.

I take this opportunity to compliment you Steve and the people who participate on this website for the information so enthusiastically provided and the willingness to educate someone as naïve as me in economic wisdom; and it is generally done in a co-operative and friendly way. It is certainly the best site on the web that I have come across.

I have a feeling though that this crisis might upset that applecart a tad.

I’d largely second Brightspark’s reply here, but add that there is indeed a danger of becoming deluded into seeing your mathematical model as the economy. This is where neoclassicals have gone so badly wrong, but one essential reason why is that they have used the wrong mathematics and done it badly to boot.

Better mathematics, as Brightspark notes, incorporates time into its analysis–whereas Neoclassical models are either time-free or so kludgy in treating time that well-trained mathematical professionals, like engineers, simply gawk in disbelief at what neoclassicals call economic models.

However there is that danger of seeing your model as the economy. The only antidote here is true empiricism–abandoning ideology and testing your model against reality as is commonplace in physics. Economists use what they call econometrics to do this, but as an excellent old paper once stated, “let’s take the CON out of eCONometrics”, and generally speaking that hasn’t been done. 99% of the models are linear and assume normally distributed error terms–which by definition will be wrong since the real economy is manifestly nonlinear.

Even then, there is the reality that economic systems evolve far faster than even biological ones, that there is a degree of purposive action in social dynamics that can’t be captured accurately by a mathematical model, and so on. However I believe that generalised dynamic economic models can capture a lot of the important dynamics of a capitalist economy. Essential here is mapping what I call the economic skeleton–the fact that all capitalist economies must have workers, capitalists bankers; that credit is needed for all transactions; that production involves time and multiple commodity inputs for commodity outputs. The mathematics of this describes the linkages in the economy, but not the behavioural dynamics (the muscles, so to speak) that articulate the skeleton.

As I expect you realise, I want to encourage engineers, physicists and biologists to usurp economics from the economists. That day may yet come, but it certainly isn’t here yet. Only a handful have become engaged with this area–Geoff Davies being one prominent example–but not enough to make a presence felt.

I suppose airfares would ratchet it up.

Most people have to think hard before spending $150.

Oh well ….

Looking at the list of speakers I cannot find any speakers who are Engineers, Doctors, Scientists or for that matter members of any of the professions who would be needed to solve the physical problems. These people would be in the forfront of real wealth creation and their awareness of science and technology is what is really needed as a major contribution to such a conferrence. “Policy minds” who do not know what they do not know could be as dangerous as neoclassical economists.

Perhaps I may be wrong there may be one or two but would this be sufficient?

Many thanks and all the best at this conferrence.

I can not answer for Steve but as one of the advocates of mathematics on this blog I would like to comment.

You make a good point, but, you claim that you could see the problem comming by questioning among other things the levels of debt. It seems to me that you were using your own mathematical model to reach this conclusion and that your model was valid.

What I have been questioning are the models used by neoclassical economists which did not even posses the validity of your model. This is illustrated by their failure to predict the current collapse.

The neoclassical models appear to have no place for the passage of time. Because of this they cannot include the effect of time delays caused by factors which you describe and changes in technology. Also the effect of feedback on both the time delays and the magnitude of the effects is totally overlooked.

None of the neoclassical models include time as a parameter, when I first saw this I could not believe it! Even Adam Smith in the 18th century showed some appreciation of the affect of the passage of time. These 21st century “neo classicals” are oblivious to it. They are full off **** er, hubris.

What they use are effectively mathematical models in the sand pit.

Yes such models can be too complex but they could also reveal methods which could be employed to stabilise the world economy and ensure that a collapse as we are now experiencing will never happen again.

That the world leaders are still listening to these people who use such primitive reasoning, is the main concern. Too few economists are have sufficient mathematical knowledge to be even aware of the control system engineering princilples which could be applied. They do no know, and they don’t know what they do not know.

You or I could do (and have done) better!