So, I delivered a plenary address in Jonkoping, Sweden at the 6th International Conference on Nonlinear Economic Dynamics, with some semi-juicy stuff from it below the fold. However, for above the fold I shall comment on the general atmosphere. What is in is agent-based modeling of the nonlinear dynamics of financial markets, especially speculative bubbles and crashes. Other topics covered included oligopoly dynamics, macroeconomic fluctuations, ecologic-economic models, and regional models, as well as some pure math stuff.
Some of the people doing the financial markets modeling are those who have been way ahead of what has gone on, such as Frank Westerhoff who was in the NY Times last fall, or Serena Sordi and Alessandro Vercelli of Siena, who have been modeling Minsky dynamics for years and are now looking very prescient indeed. But now it is very faddish to do this stuff, although I think that it is indeed the way to go. So, one participant who is an industrial organization person was complaining about "there are too many financial models," and then he chaired a session on oligopoly dynamics. Much to his annoyance, one participant who was supposed to present a paper on Stackelberg entry, completely changed his topic to.... financial market dynamics. Oh well. Guess there will be an intellectual speculative bubble in this stuff for awhile, even if some of the folks at this are doing the real thing.
OK now for the juicy stuff from my talk, which was on "Nonlinear Economic Dynamics in Urban and Regional Economics." I covered a lot of stuff that will be in my forthcoming Vol. II of the second edition of my From Catastrophe to Chaos: A General Theory of Economic Discontinuities. However, along the way I documented how Paul Krugman failed to cite other peoples' work, especially that for which he received the Nobel Prize, and showed some figures he published that look like figures in other peoples' work appearing before his that he never cited, and so on and on. I figured I might be in trouble cricitizing the Swedish Royal Academy on Swedish soil, but discovered quite the contrary: the local economists knowledgeable about this material were in full agreement and even said that I had not gone far enough. Apparently the prize not shared with some others for Krugman has created a major "scandal" behind the scenes in Sweden, with phrases such as "committee not well read" "procedures for the committee need reforming" and so on being stated. I will not say all I heard, but I must say that none of it was at all flattering to Paul Krugman, some of it reflecting astoundingly petty conduct on his part. Anyway, they all are down on his case for not citing people who did work before him for which he got the prize.
After a particularly dramatic remark on my part, there was a loud crack of thunder, and one member of the audience declared, "I knew it!"
Oh, this is not juicy particularly, but I also chaired the final session, at which it was decided to found a Nonlinear Economic Dynamics Society on my motion, with me proposing an executive committee, without me on it, but which means the outfit will probably continue to exist.
Hmmm. This did not come out as intended. Wanted the first two paragraphs visible, and the rest below the fold. Bah!
Barkley, are there online links to the conference papers?
What's a 'plenary address'?
The Oligopoly dynamics topic seems...well...very 'topical'. Along with ecological economics.
I've been wondering about how the financial 'market' dynamics work in the context of a loss of 'market'. (Most world trade now being intracorporate or between corporations that are co-managed, co-owned). Network capitalism dynamics.
"Keynote" and "plenary" are pretty similar, specially invited main speech.
About to go catch a plane for another conference abroad, but if you google "NED 09 Jonkoping" you can find the program and maybe the abstracts.
Some models allow for markets to simply disappear if they completely collapse, although what you are talking about is more along the lines of the oligopoly dynamics, where such things were discussed.
"....who have been modeling Minsky dynamics for years and are now looking very prescient indeed."
Just a brief comment regarding predictive validity and the purity of mathematics. Yes, many modelers can claim to have seen it coming. Guess what? Many on the brokerage end of the financial industry also saw it coming without the benefit of mathematical models. They simply saw that their co-workers on the financial markets side of the business were playing funny games with archane instruments. Those guys saw it coming and bailed out early. They didn't need a model to predict what was in plain sight, so long as you had a better view to the process.
The purity of one's mathematics is is relative to the purity of one's measurement process multiplied by the purity of the object or phenomenon being measured. The level of purity of any aspect of one's model is inversely related to the degree of supposition entered into the process by the pure mathematician, though I wonder if that's not an oxymoronic
Ah, Nonlinear Economic Dynamics in Urban and Regional Economics ... that sounds as exciting as the salad days of pkt, before it was taken over by retired engineers.
I'm assuming you moved straight on to the goss on Krugman to avoid people getting over-excited, but what is there from the talk that's available before Vol. II of Ed. 2?
Actually, having a bunch of software agents running around trading according to (often) simple rules, until they collapse in a heap sounds pretty cool to me. Could have saved us a lot of pain if the precient programmers were heeded and the simulations were possible 5 years ago.
The question for me is: "What rules do we create that allow for equilibrium of resources (sustainability) and end up with a system that trades rather than stagnates?"
Oops! forgot about power, didn't I. Bloody reality... (I wonder if one could use weighting to simulate power...)
are you aware that Mark Thoma no longer links to this website? I find that a shame, as I think it is important that dissident views are widely circulated. Maybe you should try to talk him into putting it back up. (I realise that his blog takes a long time to load and it probably just rolled of the bottom as extra sites were added, in all probably it doesn't represent vindictiveness on his part.)
On another point you and Steve Keen seen to pushing similar approaches (and it is one that I push, in Macro not just in finance). Are you in contact with him?
Gosh, Mark Thoma blacklists people?
Second recommendation of Debtwatch.
Post a Comment