Comments on Andreas Ortmann "Economic theories that have changed us: experimental economics", 11/07/2015
I am an economist myself by training, although my formal training was derived back to the early 1990s, more than 20 years old. As a result, I don't really know much about the experiment economics, although I have certainly heard of it and aware of it.
That said, it seems one cannot get too much into the differences between agents/people in formulating a realistic and workable economic model, simply because of the complexity that poses for modelling and to get consistent result. Everyone can be different from another. and there are billions of people on the world. People are consumers and agents, in economics. How can you model billions of different minds as individually represented ones in a model?
Again, having said that, it is possible to incorporate some key insights from experiment economics into slightly more complex economic models, so both worlds of the traditional economics and the experiment economics can be married into one workable model.
Most economic models are some abstraction of the real world, so they can capture the main aspects but simple enough to understand and apply. Of course, with computing technology advances more complex models are constructed to simulate the reality in more complex and more realistic ways.
Showing posts with label Frontier Economics. Show all posts
Showing posts with label Frontier Economics. Show all posts
2015-07-11
2010-04-05
Higher dimensions of economics
Comments on Peter Drysdale “Politics and Chinese integration into the global economy”, 4/04/2010, http://www.eastasiaforum.org/2010/04/04/politics-and-chinese-integration-into-the-global-economy/
The mainstream economics has been established on the premise of market efficiency in resources allocation, although even with that main stream, macroeconomics indicates that sometimes market can be seriously inefficient in the sense that large unemployment can occur from time to time and some non-market or super-market mechanisms, that is, government interventions have to be resorted.
Also, assets markets have shown to have tendance of extremely inefficient from time to time.
Further, there are different economies in the world that are vastly different in productivity, income levels and etc. The experiences of developing economies with different systems and growth have shown that the mainstream economics have serious limitations in terms of its applications to the non world-frontier economies.
It seems that there are multi dimensions in economics and efficiency. There may be cases where it is apparently and obviously inefficient by the norm of the mainstream economics yet the outcomes can be much more efficient than some cases where economics would say it is efficient.
Efficiency may work at higher dimensions than the current mainstream economics can comfortably handle. The current economics may be a special case or a branch in a higher dimension economics.
Maybe in economics of a higher dimension (that is yet to be developed), public institutions like government as opposed to pure market can improve the efficiency of a pure market approach. Alternatively, new institutions of a different nature from the current ones will be required to govern efficiency.
The mainstream economics has been established on the premise of market efficiency in resources allocation, although even with that main stream, macroeconomics indicates that sometimes market can be seriously inefficient in the sense that large unemployment can occur from time to time and some non-market or super-market mechanisms, that is, government interventions have to be resorted.
Also, assets markets have shown to have tendance of extremely inefficient from time to time.
Further, there are different economies in the world that are vastly different in productivity, income levels and etc. The experiences of developing economies with different systems and growth have shown that the mainstream economics have serious limitations in terms of its applications to the non world-frontier economies.
It seems that there are multi dimensions in economics and efficiency. There may be cases where it is apparently and obviously inefficient by the norm of the mainstream economics yet the outcomes can be much more efficient than some cases where economics would say it is efficient.
Efficiency may work at higher dimensions than the current mainstream economics can comfortably handle. The current economics may be a special case or a branch in a higher dimension economics.
Maybe in economics of a higher dimension (that is yet to be developed), public institutions like government as opposed to pure market can improve the efficiency of a pure market approach. Alternatively, new institutions of a different nature from the current ones will be required to govern efficiency.
2009-08-12
Frontier Economics' too good to be true, or has the government got its ETS wrong?
Comments on Michael Stutchbury “Give Malcolm his due for a clean idea”, 12/08/2009, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/give_malcolm_his_due_for_a_clean_idea/
The Frontier Economics result is very interesting indeed. If that result is correct, clearly it is a better approach and must be considered by the government, if the government is serious in achieving good outcomes in an ETS.
What is better than a greater reduction in emissions and a lower cost in doing it? The government should delay the current legislation and organise a parliamentary investigation of the Frontier Economics modeling by all political parties, and any interested public.
The Climate Minister and the government are wrong in dismissing that result so lightly. It defies any reasonable logic and common sense. It shows they are not really interested in achieving good outcomes but only in political opportunism.
The Frontier Economics result is very interesting indeed. If that result is correct, clearly it is a better approach and must be considered by the government, if the government is serious in achieving good outcomes in an ETS.
What is better than a greater reduction in emissions and a lower cost in doing it? The government should delay the current legislation and organise a parliamentary investigation of the Frontier Economics modeling by all political parties, and any interested public.
The Climate Minister and the government are wrong in dismissing that result so lightly. It defies any reasonable logic and common sense. It shows they are not really interested in achieving good outcomes but only in political opportunism.
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