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I'd push back on your use of "current equilibrium", based on how I interpret this phrase. If my interpretation is off, then I apologize. It reads to me as if y

I'd push back on your use of "current equilibrium", based on how I interpret this phrase. If my interpretation is off, then I apologize. It reads to me as if you're presenting the world as having a single equilibrium toward which the market moves. There is no meaningful static idea of equilibrium. However you want to define and measure some optimal state that we can call equilibrium, this target moves discontinuously at least with each birth and death that occurs. Each of these events either introduces or removes a set of preferences (a terrible reduction of humanity). Accounting for these will shift our "equilibrium" in any meaningful calculation of the same. There are 1.8 deaths per second and 4.3 births per second.[0][1] Again, these birth and death rates represent the minimum rate of change of equilibrium. As a follow-on effect, a birth is very likely to alter the parents' preferences in a way that will shift the equilibrium. Deaths likely shift families' and friends' preferences in a way that will shift the equilibrium. Both these second-order effects are not instantaneous (information does not spread instantly). Invention and innovation represent changes. Discovery of new natural resources represent changes. And people are not static sets of preferences. People change. Perhaps we may be able to define some equilibrium for an instant. And we can expect with near-certain probability that one instant's equilibrium is very close to neighboring instants' equilibria. But the shifts are discontinuous, and likely impossible to model with a function. [0] https://www.medindia.net/patients/calculators/world-death-clock.asp https://www.medindia.net/patients/calculators/world-death-cl... [1] https://www.theworldcounts.com/stories/How-Many-Babies-Are-Born-Each-Day https://www.theworldcounts.com/stories/How-Many-Babies-Are-B...

TeMPOraL 6y ago
I meant something else entirely: > It reads to me as if you're presenting the world as having a single equilibrium toward which the market moves. The opposite. I hinted at that by saying "the system does what it does", though I realize it may be an obscure reference[0]. The markets are. They are a dynamic system that naturally reaches some sort of (meta)stable behavior, and this is what we call equilibrium. It's not defined, it's observed. > this target moves discontinuously at least with each birth and death that occurs Disagree. To a good approximation, markets moves continuously, because it takes time for individual preferences to manifest, and preferences aren't binary switches - they're communicated through many individual decisions over time. WRT. the "death and suffering" part, I meant that large disruptions to markets usually involve events that kill and impoverish lots of people, and markets rebalancing themselves also cause that. I'm thinking of events like COVID-19, 2008, 1929, and quite often, discovery of new deposits of highly demanded resources. -- [0] - https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_what_it_does https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...
- greggyb 6y ago
  Thanks for the clarification. I did not know that reference, and it seems we're much more in alignment than I thought. I still hold that the target moves discontinuously, though not universally so. Death is the strongest argument here. A set of preferences exists, and then it doesn't. Some deaths are expected. Some are slow. Some are unexpected. Some are abrupt. Death is a binary off-switch for all preferences the deceased individual may have had. Without this collection of preferences, equilibrium abruptly jumps to some other value. Of course, in a system as large as the market, these death-jumps are going to be so small as to be effectively immeasurable. Note: expectation of death here means at a specific time. All death is expected on a long enough time scale. > To a good approximation, markets moves continuously I agree here. My discussion of discontinuity, though, is that of movement of whatever ideal equilibrium the market is moving toward (but does not achieve). The equilibrium is the target toward which a market moves. This equilibrium is incalculable or at least not calculable in less time than it would take to reach. The target may move discontinuously (though I would argue the discontinuities are small for the most part), and the process moving toward the target may be continuous, both at the same time. Ninja edit: An equilibrium in this discussion is more akin to a platonic ideal than anything concrete. The market is the system which can be observed. The equilibrium is an abstract and incalculable target.

TeMPOraL 6y ago

I meant something else entirely: > It reads to me as if you're presenting the world as having a single equilibrium toward which the market moves. The opposite. I hinted at that by saying "the system does what it does", though I realize it may be an obscure reference[0]. The markets are. They are a dynamic system that naturally reaches some sort of (meta)stable behavior, and this is what we call equilibrium. It's not defined, it's observed. > this target moves discontinuously at least with each birth and death that occurs Disagree. To a good approximation, markets moves continuously, because it takes time for individual preferences to manifest, and preferences aren't binary switches - they're communicated through many individual decisions over time. WRT. the "death and suffering" part, I meant that large disruptions to markets usually involve events that kill and impoverish lots of people, and markets rebalancing themselves also cause that. I'm thinking of events like COVID-19, 2008, 1929, and quite often, discovery of new deposits of highly demanded resources. -- [0] - https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_what_it_does https://en.wikipedia.org/wiki/The_purpose_of_a_system_is_wha...

greggyb 6y ago
Thanks for the clarification. I did not know that reference, and it seems we're much more in alignment than I thought. I still hold that the target moves discontinuously, though not universally so. Death is the strongest argument here. A set of preferences exists, and then it doesn't. Some deaths are expected. Some are slow. Some are unexpected. Some are abrupt. Death is a binary off-switch for all preferences the deceased individual may have had. Without this collection of preferences, equilibrium abruptly jumps to some other value. Of course, in a system as large as the market, these death-jumps are going to be so small as to be effectively immeasurable. Note: expectation of death here means at a specific time. All death is expected on a long enough time scale. > To a good approximation, markets moves continuously I agree here. My discussion of discontinuity, though, is that of movement of whatever ideal equilibrium the market is moving toward (but does not achieve). The equilibrium is the target toward which a market moves. This equilibrium is incalculable or at least not calculable in less time than it would take to reach. The target may move discontinuously (though I would argue the discontinuities are small for the most part), and the process moving toward the target may be continuous, both at the same time. Ninja edit: An equilibrium in this discussion is more akin to a platonic ideal than anything concrete. The market is the system which can be observed. The equilibrium is an abstract and incalculable target.