5 ms·

What a whole load of bad and unnecessary analogies. A "classical physics + some constraints" analogy for Economics would also do the job. Just because some ma

What a whole load of bad and unnecessary analogies. A "classical physics + some constraints" analogy for Economics would also do the job. Just because some magnitudes are discrete in a system, it doesn't mean quantum mechanics is needed to describe it. The distinguishing features of quantum mechanics come from the counter-intuitive mathematical predictions (entanglement, superposition, probability distributions, etc). But these are very specific and have no known analogy for Economics.

kiliantics 9y ago
I agree that the quantum analogy is terrible but, as a physicist, I don't believe anything like a classical theory is possible for economics. At least not for getting the kinds of results that people want out of economics. Physics is different because there are measurable fundamental laws that apply in all systems - or at least we have been able to determine some set of laws or approximate laws at scales where we can calculate useful things with them. Finding analogous fundamental laws in economics just won't be possible. There is no version of gravity or electromagnetism in economics where indivisible (or approximately indivisible) objects have known masses or charges. The closest thing you have is game theory, which is still very far from universal - I can't enumerate all the possible options available to each individual agent in an economic system and assign an objective utility to each option for a given agent. Not even a single individual can do that for themselves. A better physics analogy, which still falls short, is the study of emergent phenomena in complex systems. When you take large numbers of objects with well-understood properties and observe them in certain environments, large scale processes can occur across the system which cannot be easily explained by the known properties of the individual components. The sum is greater than the whole and just because you find an empirical relationship of the system in one environment doesn't mean you necessarily understand anything about its behaviour in other environments. This is what is happening in economics but we don't even understand the individual components. Assuming that game theory is the correct way to understand the dynamics of individuals, we would need a more complete theory of psychology to fully describe them, which would probably require a better understanding of neuroscience, etc.
- soVeryTired 9y ago
  Go look up representative agent models. You'll be horrified.
- alphydan 9y ago
  >emergent phenomena in complex systems Emergent phenomena in complex systems are not necessarily quantum. Weather, population dynamics, neural networks, chaotic systems can all be described with good'ol lagrangian mechanics. Other phenomena like certain phase transitions or spin glasses cannot. But what's the economic correspondence to those? Overall I agree with you. Economics should be described with the math and physics of complex systems. Unfortunately data is poor, the math is hard, the psychology is complex. So we're not quite there yet.

kiliantics 9y ago

I agree that the quantum analogy is terrible but, as a physicist, I don't believe anything like a classical theory is possible for economics. At least not for getting the kinds of results that people want out of economics. Physics is different because there are measurable fundamental laws that apply in all systems - or at least we have been able to determine some set of laws or approximate laws at scales where we can calculate useful things with them. Finding analogous fundamental laws in economics just won't be possible. There is no version of gravity or electromagnetism in economics where indivisible (or approximately indivisible) objects have known masses or charges. The closest thing you have is game theory, which is still very far from universal - I can't enumerate all the possible options available to each individual agent in an economic system and assign an objective utility to each option for a given agent. Not even a single individual can do that for themselves. A better physics analogy, which still falls short, is the study of emergent phenomena in complex systems. When you take large numbers of objects with well-understood properties and observe them in certain environments, large scale processes can occur across the system which cannot be easily explained by the known properties of the individual components. The sum is greater than the whole and just because you find an empirical relationship of the system in one environment doesn't mean you necessarily understand anything about its behaviour in other environments. This is what is happening in economics but we don't even understand the individual components. Assuming that game theory is the correct way to understand the dynamics of individuals, we would need a more complete theory of psychology to fully describe them, which would probably require a better understanding of neuroscience, etc.

soVeryTired 9y ago
Go look up representative agent models. You'll be horrified.
alphydan 9y ago
>emergent phenomena in complex systems Emergent phenomena in complex systems are not necessarily quantum. Weather, population dynamics, neural networks, chaotic systems can all be described with good'ol lagrangian mechanics. Other phenomena like certain phase transitions or spin glasses cannot. But what's the economic correspondence to those? Overall I agree with you. Economics should be described with the math and physics of complex systems. Unfortunately data is poor, the math is hard, the psychology is complex. So we're not quite there yet.