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Topic: A Computational Laboratory for Evolutionary Trade Networks (Read 1134 times) |
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Ophis
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Re:A Computational Laboratory for Evolutionary Trade Networks
« Reply #1 on: 2003-01-24 13:32:02 » |
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"The authors who think that they have substituted, in the analysis of the market economy, a holistic or social or universalistic or institutional or macroeconomic approach for what they disdain as the spurious individualistic approach delude themselves and their public. For all reasoning concerning action must deal with valuation and with the striving after definite ends, as there is no action not oriented by final causes." - Ludwig von Mises
Free-market economists have long demonstrated that aggregate figures, national indexes, and other statistical measurements are NOT appropriate tools to be used in influencing or determining the best course of individual action. In this sense, economics is more of a qualitative, as opposed to quantitative, science. (see Human Action, Chapter II. The Epistemological Problems of the Sciences of Human Action , Ludwig von Mises, 1949).
However, governments, in their desire to meddle and influence economic affairs, have had a need for aggregate figures through which they could justify their interventions. As a consequence, many economists are more than happy to find employment in providing these justifications to the state.
However, for economists who reject misleading indicators like national averages, and market equilibrium equations, research and computational tools such as the one presented in this article can truly be a blessing.
The fact that this framework simulates the decision-making process of numerous entities in a controlled universe provides economists with the ability to observe what was up-to-now only available in historical real-world experiences. Given a complex-enough set of rules, this system could likely be made to approximate the real-life impacts that significant economic interventions (like the reduction of interest rates) have on individual actions. Such a system could potentially provide better research and forecasting capabilities than the current macro-economic indicators.
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David Lucifer
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Enlighten me.
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Re:A Computational Laboratory for Evolutionary Trade Networks
« Reply #2 on: 2003-01-25 09:59:40 » |
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Quote from: Ophis on 2003-01-24 13:32:02
The fact that this framework simulates the decision-making process of numerous entities in a controlled universe provides economists with the ability to observe what was up-to-now only available in historical real-world experiences. Given a complex-enough set of rules, this system could likely be made to approximate the real-life impacts that significant economic interventions (like the reduction of interest rates) have on individual actions. Such a system could potentially provide better research and forecasting capabilities than the current macro-economic indicators.
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I find it very gratifying when someone else understands the potential of our work. It has been a tough struggle, even (or especially) in the economist community.
I feel I should add a disclaimer to your endorsement and say that we have to be cautious about suggesting that a virtual laboratory could be used in forecasting the effects of policy changes. Since the economy (even very small scale ones like we are simulating) is technically a chaotic system, any tiny variation in initial conditions can lead to large scale divergences in behavior. In other words, chaotic systems cannot be predicted, even theoretically.
That said, the simulation can lead to be better understanding of the real world systems, so they can make our predictions more accurate. I don't mean to say that you, Ophis, suggested otherwise, but I wanted to clarify in case another reader misinterpreted.
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Ophis
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Re:A Computational Laboratory for Evolutionary Trade Networks
« Reply #3 on: 2003-01-25 12:41:48 » |
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Good clarification. Obviously, no system, as sophisticated as it may be, is ever going to be able to predict the whole of human economic affairs.
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Ophis
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Re:A Computational Laboratory for Evolutionary Trade Networks
« Reply #4 on: 2003-01-25 15:25:28 » |
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Quote from: David Lucifer on 2003-01-25 09:59:40
I find it very gratifying when someone else understands the potential of our work. It has been a tough struggle, even (or especially) in the economist community.
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I suspect that your work might not have been presented to the appropriate "community" of economists.
Today's mainstream schools of economics have very much re-focused on a set of macro-economic theories (mostly Keynesian) that unfortunately leave little room for such works as what you and your collegues have done (see Ludwig von Mises' quote in previous article).
The mainstream economists are, of course, constantly pursuing further development of their economic models but an unfortunately few number of them dare review the basis and assumptions on which their models are built. Over the last century or so, Keynesian economics have won over the academic as much as the political economists. The monetary strategies of central bankers, Bush's economic stimulus plan, as well as the common demand side dogmas are all examples of how Keyne's theories have a day-to-day impact on our lives.
There is an alternative school of economics that would certainly be interested in the TNG laboratory. This school is called the Austrian school of economics. The name doesn't imply that this is the economic model that is followed by the Austrian nation, but simply that its early and most influential economists had their roots in Austria (Carl Menger, Eugen von Böhm-Bawerk, Ludwig von Mises, and others).
The reason why Austrian economists would likely be interested in the TNG lab is that one of the factor that most differentiates them with mainstream economists is their praxeological approach to economics. Austrians do not put much faith in aggregate numbers but explain economic phenomenas by studying the human behavior and needs that give rise to economic activity. It seems to me that the TNG lab would be a valuable tool to such economists.
So I would suggest that the TNG Lab paper might find more interest in a publication like the Quarterly Journal of Austrian Economics (see: http://www.mises.org/qjaedisplay.asp).
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