On Mar 16, 2009, at 3:45 PM, Jim Devine wrote:
ravi wrote:
http://www.sciam.com/blog/60-second-science/post.cfm?id=benoit-mandelbrot-and-the-wildness-2009-03-13
<
Mandelbrot says that "A very large part of economic theory is just
physical theory with the words changed."
But standard economic theory is not like quantum mechanics at all even
though both give an important role to randomness.
As you point out in a later message, I think Mandelbrot is talking
about standard physics. His point, as I see it, is the reverse of the
criticism that Economics lacks the sophistication (or success) of
Physics... he seems to be saying that, perhaps motivated by the above
criticism, economic theories have been so closely modelled on physical
theory (literally taking a physical theory and replacing the terms of
Physics with those of Economics), even if the ensuing results are
useless. As the adage goes: nobody got fired for buying IBM!
--ravi
--
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