Re: mathematical assumptions (Physics Economics)
As an economist who was once a physicist, I have to say that there is quite a lot of difference between the kinds of math economics and physics typically use. Sure, they both use calculus, but beyond that the similarities are scarce. Differential equations across space and time dominate physics, but have almost no place in economics. In physics one almost always knows the specific form of a function or differential equation, while in economics one typically does not know the specific functional forms, and so must reason in terms of convexity etc., concepts that are foreign to most physicists. Math of maximization dominates economics, but has only a side supporting role in physics. When physicists do maximize, they almost never deal with non-interior solutions. While some basic concepts of information and probability are used in thermodynamics, economists deal with these issues in far more detail. Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
RE: mathematical assumptions (Physics Economics)
Walt Warnick wrote: ... the business cycle behaves strikingly like an automatic control system that has a positive feedback loop and damping. ... The parallel goes further. ... a stable automatic control system involving continuous feedback can become unstable if that same feedback is, instead, sampled. Control theory is an application of single-agent decision theory, and since economics is basically multi-agent decision theory, I'd say control theory is closer to economics than to physics. Of course one often needs to know some details of the physics of the situation one is controlling, but usually control problems are dominated by decision theory issues, not physics issues. Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Asst. Prof. Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: mathematical assumptions (Physics Economics)
I just checked out *More Heat Than Light: Economics as Social Physics: Physics as Natures Economics*, also by Philip Mirowski. Here are a couple of quotes from the introduction that I found interesting: One rapidly discovers that the resemblances of the theories [of physics and economics] are uncanny, and one reason they are uncanny is because the progenitors of neoclassical economic theory boldly copied the reigning physical theories in the 1870s. ...Neoclassicals did not imitate physics in a desultory or superficial manner; no they copied their models mostly term for term and symbol for symbol, and said so. Neoclassical economics made savvy use of the resonances between body, motion, and values by engaging in a brazen daylight robbery: The Marginalists appropriated the mathematical formalisms of mid-nineteenth century energy physics, ..., made them their own by changing the labels on the variables, and then trumpeted the triumph of a truly scientific economics. Utility became the analogue of potential energy; and the Marginalist Revolutionaries marched off to do battle with classical, Historicist, and Marxian economists. Unfortunately, there was one little oversight: The neoclassicals had neglected to appropriate the most important part of the formalism, ... namely, the conservation of energy. (pp 3 9) From skimming a couple of later chapters, it seems Mirowski also finds a close relationship with later 20th century economics and 19th century physics. (He notes that on the surface Samuelson draws an analogous relationship between modern physics and modern economics, but when Mirowski digs deeper, he finds it to be simply a variation of 19th century physics in disguise.) He seems to credit/blame Samuelson for much of the 20th century development at least thats what I gathered from reading a few pages here and there. Seth Giertz --- Ole J. Rogeberg [EMAIL PROTECTED] wrote: I can give you a completely opposite reference :-) Philip Mirowski, in the Cambridge Journal of Economics, nr. 8, 1984, pp. 361-379 has an article Physics and the marginalist revolution, where he argues that the similarities between the physics of the 1800s and the economics of the 20th century results from economists taking the mathematical models then in vogue and reinterpreting them in economic terms. Neoclassical economics is bowdlerised nineteenth century physics. The second part of his argument is that this is not reasonable. The article was fun, whatever one may think of the conclusions. Apparently, this is a major theme of Mirowski. I gather that he's written on this subject elsewhere too. And been strongly criticised by others, of course. Ole At 09:25 11.02.2002 -0800, you wrote: Dear all, I once heard about a paper by a physcist who juxtaposed the mathematical assumptions in economics with the mathematical assumptions in physics. Evidently the author found the assumptions in economics to be quite reasonable. I've never been able to locate it. Is anybody familiar with such a work, or anything similar? Curiously, jsh __ Do You Yahoo!? Send FREE Valentine eCards with Yahoo! Greetings! http://greetings.yahoo.com __ Do You Yahoo!? Send FREE Valentine eCards with Yahoo! Greetings! http://greetings.yahoo.com
Re: mathematical assumptions (Physics Economics)
Thank you all for your comments and suggestions. I appreciate them very much! I just re-read the rules for the armchair mailing list, and I hope this is not too methodological or whatever. Sorry about that! I actually have read Mirowski's More Heat Than Light and found it quite informative. Interestingly, Richard Feynman, of all people, blew Mirowski's arguments out of the water (ex ante) with an almost throw-away line in his Physics Lectures. He asked himself why was math an appropriate tool for studying physical models. His answer was merely that math is a pre-packaged, internally consistent logic that physicists can apply to the aformentioned models. Hmm. By extension, that reasoning seemed to apply to economics quite well. It seemed to me that Mirowski's thesis was that math, specifically the math used in neo-classical economics, is an inappropriate tool for economic study because economics lacks a conservation rule analogous to the conservation of energy in Newtonian physics. However, if preferences are constant over time, then the conservation rule should be satisfied, right? I think that is my weakest link. I hope that last paragraph hasn't made me to appear a bonehead answering his own questions. (I'm boneheaded enough without doing that.) I guess what I was origially wondering was not Is math appropriate? But rather, given that math is appropriate, are the assumptions about rationality, preferences, convexity, continuity, inter alia, as well as some of the more ad hoc assumptions of many macro models as reasonable as the assumtions made in the king of all sciences? Obviously, I'm not really sure how to phrase the question in the most clear manner. I apologize for that. If this question is inappropriate for this forum, please let me know. Thanks again, jsh --- Seth H. Giertz [EMAIL PROTECTED] wrote: I just checked out *More Heat Than Light: Economics as Social Physics: Physics as Natures Economics*, also by Philip Mirowski. Here are a couple of quotes from the introduction that I found interesting: One rapidly discovers that the resemblances of the theories [of physics and economics] are uncanny, and one reason they are uncanny is because the progenitors of neoclassical economic theory boldly copied the reigning physical theories in the 1870s. ...Neoclassicals did not imitate physics in a desultory or superficial manner; no they copied their models mostly term for term and symbol for symbol, and said so. Neoclassical economics made savvy use of the resonances between body, motion, and values by engaging in a brazen daylight robbery: The Marginalists appropriated the mathematical formalisms of mid-nineteenth century energy physics, ..., made them their own by changing the labels on the variables, and then trumpeted the triumph of a truly scientific economics. Utility became the analogue of potential energy; and the Marginalist Revolutionaries marched off to do battle with classical, Historicist, and Marxian economists. Unfortunately, there was one little oversight: The neoclassicals had neglected to appropriate the most important part of the formalism, ... namely, the conservation of energy. (pp 3 9) From skimming a couple of later chapters, it seems Mirowski also finds a close relationship with later 20th century economics and 19th century physics. (He notes that on the surface Samuelson draws an analogous relationship between modern physics and modern economics, but when Mirowski digs deeper, he finds it to be simply a variation of 19th century physics in disguise.) He seems to credit/blame Samuelson for much of the 20th century development at least thats what I gathered from reading a few pages here and there. Seth Giertz --- Ole J. Rogeberg [EMAIL PROTECTED] wrote: I can give you a completely opposite reference :-) Philip Mirowski, in the Cambridge Journal of Economics, nr. 8, 1984, pp. 361-379 has an article Physics and the marginalist revolution, where he argues that the similarities between the physics of the 1800s and the economics of the 20th century results from economists taking the mathematical models then in vogue and reinterpreting them in economic terms. Neoclassical economics is bowdlerised nineteenth century physics. The second part of his argument is that this is not reasonable. The article was fun, whatever one may think of the conclusions. Apparently, this is a major theme of Mirowski. I gather that he's written on this subject elsewhere too. And been strongly criticised by others, of course. Ole At 09:25 11.02.2002 -0800, you wrote: Dear all, I once heard about a paper by a physcist who juxtaposed the mathematical assumptions in economics with the mathematical assumptions in physics. Evidently the author found the assumptions in economics to be quite reasonable. I've never been
