http://www.news.com.au/couriermail/story/0,23739,26655966-3102,00.html
“ALMOST half of first-home buyers lured into the market by the Rudd Government’s $14,000 grant are struggling to meet their mortgage repayments and many are already in arrears on their loans.

Thousands of young home buyers are using credit cards or other loans to meet obligations, while those in “severe stress” are missing payments.

Just weeks after the grant was withdrawn, a survey of more than 26,000 borrowers conducted by Fujitsu Consulting has found 45 per cent of first-home owners who entered the market during the past 18 months are experiencing “mortgage stress” or “severe mortgage stress”.

****************************

Nothing to see here folks, it’s all good;

http://www.news.com.au/business/secret-summit-of-top-bankers/comments-e6frfm1i-1225827289543
“THE world’s top central bankers began arriving in Australia yesterday as renewed fears about the strength of the global economic recovery gripped world share markets.

“Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet tomorrow at a secret location, the Herald Sun reports.”

Join the dots. Anybody betting AGAINST yet more Govt wasteful spending, higher levels of absurd Sovereign debts?

“There is no such thing as sound money.”
By government fiat and government failure to criminalize fraudulent monetary policy.

Re: Open Source Economics

I hoped you would find some merit in it. I realise you are a busy guy so I have taken the liberty of combining the exchanges below, in last to first order, and summarising the points raised. This may be helpful if this develops into a brainstorming session.

Steve, I assume that you would welcome anyone jumping in who wants to. If comments could be flagged “Re: Open Source Economics” I will collect the input. If I overlook any key point from a comment please flag OSE OMISSION in caps and I will pick it up.

Steve, if you think this approach is flawed please let me know and I will desist.

………………………………………………………….
Summary of:
Angophera #20
Steve Keen #23
ak #24

What do we seem to have tentative agreements, or disagreements, on so far?

1. There is very little money available to kickstart something.

2. The application of the open source software development model could be applicable to the development of Steve Keen’s brainchild; the multi-sector, dynamic economic model.

3. If this goes forward the name given to it IS important (see point 1). Suggestions to date:
Dynamic Open Source Economics
(The?) Open Source Economics Project
Open Source Economic Operating System or Open Source Economic OS
Open Source Economic Model

FWIW If you have limited money it is best to latch onto words that you don’t need to explain or redefine. eg. Does the word “Dynamic” have a self-evident meaning to your target audience?

You can sub-head a good name with a pithy statement of your intentions eg. “Building an economic operating system that ……” You can also change the text to suit the audience.

eg. Many moons ago the beer brand Fourex wanted to trumpet their number 1 position in the QLD market. For the public they chose “Queensland’s Favourite Beer”. For the publicans they went with “Queensland’s Best Selling Beer”.

You have already taken on a big task in trying to change the current meaning of the word “economics” from “total load of crap” into something respectable.

4. There are potential problems in the open source approach versus a closed model. Areas of potential conflict include: project management, ownership, profit expectations and ????

SK
“…a lot of work has been done developing a specialised tool by a professional programmer who would prefer not to have his material Open Source….”

ak
“However open-source project management may be close to herding cats.”

“The trouble with the proprietary tool approach is that it is GUI-centric and it doesn’t allow for data export…”

“Why data cannot be exported in an open xml format for example?
From technical point of view it is in my opinion the same kind of social manipulation as the neoclassical stuff in economics and it doesn’t add much (or any) value from the user’s point of view.”

IMHO None of the above represent an insurmountable problem.

http://www.simondixon.org/131/2009/02/16/

Money is whatever the herd think it is, and same goes for the store of value. You can’t impose sound money by fiat. As soon as you try and do this the clever beasts among the herd think of a new money substitute and then the rest of the herd chases off after them.

The only way of enforcing your sound money is via a non democratic hegemony that specifies at all times the definition of soundnessand then enforces it at gunpoint.

How can you possibly combine the ballot box with a single definition of sound money? Sound money is a antiquated concept in an age of mass democracy.

The reality is, money is a commons.

I’d put Paul Krugman on the list for his cheerleading of all the inflationary policies but he was in fact a bit player. I don’t think his political writing had that much influence. Because Keynesianism is itself self contradictory it sometimes makes him sound right. Of course a stopped clock is right twice a day, but is not operating on a sound model for predicting the time.

Despite picking Greenspan this was not however mainly a US problem. This was a global problem with central bankers from most countries participating in the foolishness, even China and Japan. Had the US not existed the crisis would have erupted somewhere else and spread to the other countries. Greenspan certainly was not responsible for the situation in Iceland, the UK, Canada, the rest of Europe, Japan and so forth.

I think Keynes should have been on this list. Many of the old “common sense” monetary fallacies were popularized by him and rationalized by his economic theories. He is the main culprit in the justification of many economic fallacies that our current monetary and financial system is based upon. He did so both post facto and pre facto. He even invented a few of his own like liquidity preference as a justification for the old “unemployed resources” fallacy of banking.

Krugman is a good example of an economist who has fallen for this Keynesian fallacy with his “Baby Sitting the Economy” article. His article shows his <a href="http://blog.mises.org/archives/009699.asp"total lack of understanding of even what money is.

The worst fallacy that Keynes came up with and one of the main causes of the current situations is his paradox of thrift hypothesis.

Because of Keynes Nixon went completely off gold allowing a completely free floating fiat currency system to spread around the world. In 1971 after doing this Nixon was quoted as saying, “I am now a Keynesian in economics”. This was a paraphrase of Milton Friedman’s 1965 “We are all Keynesian’s now”. Yes, those blaming Friedman need to look back to Keynes.

I’d say that if Keynes was on the list then he would have been given my strong consideration. It’s because of Keynes and the popularity of his incorrect explanations of the Great Depression that not only haven’t we been able to get to a sound money system, we have moved in the opposite direction.

I agree.

It is all about project management and team management. Why should Steve waste time on setting up a new blog?

However open-source project management may be close to herding cats.

The trouble with the proprietary tool approach is that it is GUI-centric and it doesn’t allow for data export – this is the business model of Apple, Microsoft and the few others. The extreme example of the GUI-based approach is visual programming where the interface is almost everything – which is not the same as closed data formats of course.

http://en.wikipedia.org/wiki/Visual_programming_language
(Vissim is listed there)

Why data cannot be exported in an open xml format for example?
From technical point of view it is in my opinion the same kind of social manipulation as the neoclassical stuff in economics and it doesn’t add much (or any) value from the user’s point of view. I am not against closed-source software (I work for a company selling closed source software and I am happy with the model) but against closed environments, protocols and data formats. (I will never buy a product of Apple for that very reason).

Once the data is liberated the rest is pretty much straightforward. You can build your own toolchains and pick / build different components …

We will see how the alternative approach works as I am working on solving this problem right now. For me the most interesting part is being able to tell from the modelling what really makes the system behave in a certain way – that is to display a certain type of instability. So far all the dynamic models produced by Steve are similar to a predator-prey model. This may be good at the extreme-macro end of economics but is most likely not applicable to simulations including markets as data doesn’t look there like a simulation of Lotka-Volterra equations.

The following section also partially addresses issues raised by Frank.

What if Soros is right with his reflexivity? I couldn’t stop thinking about this issue because the shapes of graphs depicting individual shares, indices, exchange rates or commodity prices changing value in time are not like a predator-prey model. These shapes are distinctively different. This doesn’t prove anything but makes me thinking about other possibilities… I don’t agree with MMT scholars in ignoring (or pretending to ignore) asset markets and financial markets in general. They do exist even if we don’t like them or want to get rid of them.

The original model of reflexivity described in http://arxiv.org/PS_cache/arxiv/pdf/0901/0901.4447v1.pdf does not include time at the very beginning.
Initially it is y=f(x) and x = phi(y) (cognitive and manipulative functions). Note I haven’t read the Soros’ book (yet).

In my opinion the system model of reflexivity should be properly built using continuous time rather discrete time. Then it is the same as the generic non-linear closed control feedback loop described by the control theory.

“The evolution of x and y with time” is considered in the article – but in discrete time domain only. x and y are functions of discrete time x_i,y_i where i=1… rather than functions of continuous time x(t), y(t) – even if stability of the fixed points is considered in the context of continuous time.
( This can be inferred from the sentence “Suppose f ( x) and phi(y) are differentiable functions…”)

Please bear in mind that discrete time control systems are currently even more common than continuous time (analogue) systems but the analysis and design work is very often performed in the continuous time domain.

What is crucial for the subject championed by Steve is that quite often we may not be able to write the equations in the form of system of ODEs: dy(t)/dt = g(x(t),y(t) and dx(t)/dt=h(x(t),y(t)) . (ODE – “a relation that contains functions of only one independent variable, and one or more of its derivatives with respect to that variable” see http://en.wikipedia.org/wiki/Ordinary_differential_equation ). We need to consider y(t)=g1(x(t),y(t) and x(t)=h1(x(t),y(t)) what of course in some cases might be collapsed to a system of ODEs.

That’s why I am sceptical whether benefits of having a very slick specialised graphical interface to the simulation program (like Vissim) are really that huge. Of course generic simulation programs can deal with all feedback systems not only these described by ODEs and maybe these things can coexist easily in Vissim or Mathcad – I don’t know, I’m not going to spend a lot of money or fiddle with the “free” version only to play with a program a few times if I have a free alternative (Scilab). But in my opinion the emphasis should be put on what’s “under the bonnet” of the model rather than on decorating it with hundreds of variables when certain very fundamental components (namely asset markets) are missing. One day they will need to be added and then Mr Soros may be convinced fork out a few grand to buy a new version of Vissim…

I am even not touching a very interesting topic of multi agent simulations and linking micro scale models with macro scale.

Disclaimer:
I graduated as a hardware engineer so my brain is tainted with the low-level stuff.