70. Physicists Try to Predict Economy
April 22, 2009 § Leave a comment
Part of the problem wit economics is it only looks at dollars and their relationships. This is really financial, not economics, which should be more broad. What “counts’ is what people make and want to buy. Few of us make anything, it is hard to sell, because buyers have changed course. the financial types want to resurrect a credit based economy.
for example, we get
anticipate the next crisis and find our way out of this one, we may have to cast off economic and financial dogma and adopt ideas inspired by physics and other natural sciences, disciplines in which the notion of unstable and unpredictable systems is nothing new. For instance, the technology now exists to go beyond economics to build a massive, complete computer model of the modern economy, from the corner store to the city bank and the Federal Reserve.
With such a model, physicists would be able to track changes in the economy dynamically. There have even been calls for an ambitious effort akin to the Manhattan Project, which built the atomic bomb, to bring the most sophisticated mathematics and computer modeling to bear on managing the world’s economies more aggressively than has ever been attempted.
But the article only speaks to analysis of financial dynamics, not the making of stuff. Even the corner store is analyzed in terms of cash flow, not real goods.