To help model financial systems, some economists are turning to biology(theatlantic.com)
theatlantic.com
To help model financial systems, some economists are turning to biology
https://www.theatlantic.com/amp/article/549725/?single_page=true
15 comments
Economics 2.0 from Accelerando here we come.
So your comment was very interesting in that it kicked off a 30 minute wiki investigation into that book and other sci-fi novels. I'm currently finishing 2312 from Kim Stanley Robinson and he uses the term Accelerando, so that piqued my interest for searching [0]. Haven't read any Stross, but it looks interesting!
[0] https://en.wikipedia.org/wiki/Accelerando#Title
[0] https://en.wikipedia.org/wiki/Accelerando#Title
It's exceptionally good.
His Laundry Files are excellent as well.
I politely disagree - they are funny, in a wink-wink, nudge-nudge sort of way (if you've read your Lovecraft), but pale compared to his 'harder' SF (like Accelrando, Singularity Sky, Glasshouse). That said, I do much prefer the Laundry Files stories to The Merchant Princes, but I have a low tolerance for Urban Fantasy...
His blog also contains regular fascinating commentary on world events, future economics, runaway AI, sci fi world-building, and the various difficulties associated with predicting the future. Charlie is an under-appreciated polymath, honestly.
http://www.antipope.org/charlie/blog-static/
http://www.antipope.org/charlie/blog-static/
Wait, is "lobsters" inspiration for the HN rival of the same name?..
I'm not sure. It may just be a lucky name-snipe.
I suspect financial market are like a hoey trap for economics researchers. Fast, plentiful transactions, rules about information flow and limitless liquidity, "scientific" valuation of derivatives...
It's so damn close to a theoretical model and it exists in real life! Data is easily accessed and interpreted. Compare this to the markets for real estate, used cars, or online advertising. It's all precise enough to tie to monetary rules, central bank actions ...the policy levers top economists have available in a normal year.
Whatever your theory, it will be easier to test for publicly traded stocks or commodities.
The problem is that public markets are formalized, centralized markets. They are rational by design. This is unlike every other market.
To extend their ecological metaphor a different way... Researching public markets is like cells in a petri dish, not a real ecology.
It's so damn close to a theoretical model and it exists in real life! Data is easily accessed and interpreted. Compare this to the markets for real estate, used cars, or online advertising. It's all precise enough to tie to monetary rules, central bank actions ...the policy levers top economists have available in a normal year.
Whatever your theory, it will be easier to test for publicly traded stocks or commodities.
The problem is that public markets are formalized, centralized markets. They are rational by design. This is unlike every other market.
To extend their ecological metaphor a different way... Researching public markets is like cells in a petri dish, not a real ecology.
Which doesn't mean it's not interesting to study :) The omnipresence of fibonacci ratios is interesting by itself.
Last year, I was reading Proudhon's criticism of the speculative part of financial markets. His main objection was that speculation was adding absolutely no value to the world, by opposition to investors (who help making something useful real) and merchants (who displace products from somewhere where they're abundant to somewhere where they're scarce). It hitted me back then: actually, they do produce something, they produce data. Financial markets have produced the longest lived and most detailed dataset ever (I can't think of a bigger one, at least). Would be a waste not to try to use it.
Last year, I was reading Proudhon's criticism of the speculative part of financial markets. His main objection was that speculation was adding absolutely no value to the world, by opposition to investors (who help making something useful real) and merchants (who displace products from somewhere where they're abundant to somewhere where they're scarce). It hitted me back then: actually, they do produce something, they produce data. Financial markets have produced the longest lived and most detailed dataset ever (I can't think of a bigger one, at least). Would be a waste not to try to use it.
True, I don't mean to say it's a bad idea to study it. I just mean "watch out" with theories that are general, but studied mostly within the confines of these market where the dataset is (as you say) orders of magnitude bigger/better than anywhere else. .. searching under a streelamp
Are turning to biology (present tense)?
Evolutionary economics has been a thing since 1898 https://en.wikipedia.org/wiki/Evolutionary_economics
And had a resurgance in the 1990s, see for example R. H. Day & P. Chen, eds, ‘Nonlinear dynamics and evolutionary economics’, Oxford University Press, USA
Evolutionary economics has been a thing since 1898 https://en.wikipedia.org/wiki/Evolutionary_economics
And had a resurgance in the 1990s, see for example R. H. Day & P. Chen, eds, ‘Nonlinear dynamics and evolutionary economics’, Oxford University Press, USA
Could the doubling of stock price of CUBA, mentioned at the beginning of the article, be a result triggered (largely or merely partially) by a certain number of automatic trading systems that did not directly involve human rationality (or irrationality) -- or simply without any manual intervention?
This reminds me of Sugarscape.
If you want to see what economic understanding will eventually look like, just cut to the chase and read The Nature of Economies today.