3 ms·

I'm not sure oscillation is a good metaphor. It could be a random walk, which might appear periodic, but is not.

• ajross 4y ago
  Virtually all feedback systems[1] have oscillatory modes in their solutions. Calling something a "random walk" doesn't tell you how the choices of direction are made, but in economics (and electronics) that's something that's subject to analysis. So I like mine better. [1] Which an economy is, almost by definition: spending makes the people who sold you stuff richer, who then spend; tight purses mean the producers are poorer too.
  • xapata 4y ago
    An autoregressive system with a positive coefficient is a feedback system, yet it is not oscillatory. Any appearance of such is an illusion, like seeing faces in clouds.
• imtringued 4y ago
  It is not a metaphor if you think the Fed is applying control theory to regulate the economy. But some people take it too far and think if there was no Fed there wouldn't be any oscillation. That is not true. Bitcoin also "oscillates". Oscillations happen because of a time lag that leads to an overshooting of the target which then leads to overshooting on the way back and so on. The economy never becomes perfectly stable but there is no rule that the oscillation can't be smoothed out until it is no longer a problem. We aren't that far yet.
  • xapata 4y ago
    Calling it an "oscillation" means that you know the causal mechanism has a spring-like behavior, which is a more complex model than a random walk. A random walk can easily appear to be an oscillation, but is not one.