On 12/31/2014 5:13 AM, Jim Wilkins wrote:
"mike" wrote in message
...
On 12/31/2014 3:42 AM, Jim Wilkins wrote:
"Mike Spencer" wrote in message
...

Ed Huntress writes:

On 30 Dec 2014 19:14:05 -0400, Mike Spencer
wrote:

Ed Huntress writes:

Now he has to spend the rest of the day running his
latest predictive econometric model on his company's
cloud-networked
SPSS system. He has a master's degree in math and a degree in
economics, and does econometric research and analysis for a top
consulting firm.

Ask him what relevance, if any, Stuart Kauffman's Origins of
Order
might have to to his research and analyses. And report back
here
with his answer.

His reaction: "Stuart who?" g

He doesn't know about Kauffman.

Dang. Well, no shame in that. Kauffman isn't an economist. :-)

Just ask him if complexity catastrophe or complexity theory or
anything along those lines enters into his econometric models.

I'm no math wizard but it strikes me much of the apparently
baffling
impenetrability of economics and finance derives from the fact
(alleged, by me :-) that we've reached a level of complexity that
defeats statistics or model that don't account for it. And part
of
the problem is that "models" probably *can't* account for it.

--
Mike Spencer Nova Scotia, Canada

How can the models account for the actions of financiers who are
smarter than the model makers?


Interesting point.
Model makers attempt to quantify the effects of things like supply
and demand.
Financiers are more concerned with manipulating the system for
personal
gain. Manipulation may not follow statistical models. It may, in
fact,
exploit vulnerable points in the model to systematically game the
system.
My computer being five milliseconds faster than yours and
repeatedly beating
you to the punch is probably not in the model.

But that may not have a direct effect on jobs going overseas.

I've repeatedly heard that it won't be economically practical to
manufacture the widget I've just prototyped in the US, because the
pain of wringing adequate quality from China is less than the pain of
US regulations and unions. Sometimes that's based on direct experience
with the previous model, built here with some imported parts.


I don't doubt that at all. To fix it, we have to either tax imports
or work for wages competitive with the rest of the world.
Fat chance of getting the unions to cut salary demands.
Taxing imports enough to do any good will create immediate
retaliation that may bring the whole international trade Jenga Tower
crashing down. I think we're in for a long, slow, gridlocked spiral
down. I pray that it takes at least 30 years and I won't see the end.

Much of the regulation comes from our litigious society and the need
to create a cause out of everything.
One kid gets killed in a car accident and suddenly we have
"Billy's Law" that greatly increases the safety requirements
for car seats. Nobody worries about how that interacts with
"Betsy's Law" or "Little Johnny's Law" or all the other regulations
on the books.
30,000 people a year are killed in auto accidents.
If we worried about that, we'd have to outlaw autos.
But, at least we won't have a repeat of Billy's tragic death.