shaky foundation of economics

still on the issue of the cancelled singularity

a dinner chat between a physicist and an economist on the physical limits to infinite growth , the infinite grwoth postulated by economists in their models

I got there from this tweet on erogicity economics https://twitter.com/DrCirillo/status/1201782869712146432

and gave another read to Ole Peter’s Nature paper which sinks deeper in my reasoning on economics

It all started because some economist on Facebook complained that some other economist had opposing views, but this is not the point, he started with an “in science, no economic theory …” science and economics so close in one sentence got me thinking about epistemics

a comprehensive article on “is economics a science?” lots of quotes so probably it isn’t you would not need so many instead

efficient markets, or not

on askblog I read of Fama efficient market hypothesis and monetary policy https://www.arnoldkling.com/blog/finance-theory-and-the-fed/

he says that “Actually, the central banks don’t do anything real. They are issuing one form of debt to buy another form of debt. If you are an old Modigliani–Miller person the way I am, you think that’s a neutral activity: You’re issuing short-term debt to buy long-term debt or vice-versa. That’s not something that should have any real effects

I should study the Efficient Market hing. It also prompted me to punt on reading list Mandelbrot The (Mis)Behavior of Markets https://www.goodreads.com/book/show/665134.The_Mis_Behavior_of_Markets

things to grow

of models

yesterday I have to give some advise on Covid and while I was talking I said to myself, “you re not anexpert why would you do that” and I answered to myself that “I ve read thinks from good sources, I have checked facts, I have a model of the pandemia in my mind and I believe it is true”

So I felt the urge to reread something I had read sometimes ago in Douglas Hoftadter Strange Loopes and I went looking for it and was the story on Simmballism, SImms and Careenium the billiard pool with vibrating edges

and yes, this is what I needed to read to feel good about models, my belief do not have to be justified alla the way down to single evidences and experiments

Bayes is lean

an ignorant definition lerts me understand Bayes success in recent times

“Bayes’ core insight of gradually getting closer to the truth by constantly updating in proportion to the weight of the evidence” really lean statistics 🙂

the quote from Tetlock book on Superforecasters, I haven t read it. I neither read Lean startup, I don’t really remeber Bayes Theorem so I might be wrong in putting together things I do not study, but still the quote is suggestive

It come from here https://arbital.com/p/bayes_rule/?l=1zq

I did not know arbital, it is in less wrong territory I guess, I am going to study Bayes there

BTW all orginitase here “What relevance does this have for the LW-Yudkowsky-Bayesian rationalist project?” found in this SSC article about metis vs high rationalism. I think it’s all in the zeitgeist https://slatestarcodex.com/2017/03/16/book-review-seeing-like-a-state/

step back “seeing like a state” recycled as “seeeing like an algorithm” ref TikTok, I think misusued nd rather sinister but here it is Eugene Weiwei https://www.eugenewei.com/blog/2020/9/18/seeing-like-an-algorithm

Fad chasing pigs

the story of Soros and Druckenmiller (was it at quantum fund?) taking opposite sides on the dotcom boom

Expert Forecasts

IEA-wrong-fcast_panelsBCE-wrong-forecasts

ECB inflation forecasts from 2012 to 2020 mostly wrong in the same direction, in 2020 they changed their direction, maybe they are a reverse benchmark 🙂

IEA sistematically undervalued renewables potential in their yearly forecasts

beware the experts, don’t believe what they say, there’s always room for things to go the way you like best

from growth to risk

1960 the year singularity was cancelled on SSC. History developed mainly in Malthusian trap, with industrialization we got out of the trap and started growing product percapita in an exponential growth. That stopped in the 60’s

German sociologist Beck sensed that capitalism was getting into its second stage, from growth to risk priority. Adam Tooze on Foreign Policy

see also Parrow with normal accidents

Noah Smith on “What happened in 1971 along the lines of singulraty cancelled in 1960. https://twitter.com/Noahpinion/status/1306264582046937088

Assuming that the secular trend was not negated, we are simply in the through of the secular cycles, how long would be this cycle and how high would the upswing carry us ? Check also Turchin and Kondratiev for longer cycles

Turchin Cliodynamics “Cliodynamics is entirely different. Its roots are in nonlinear dynamical systems. We don’t go out looking for cycles; but we don’t shy away from them when there is robust evidence for them. In Structural-Demographic Theory, in particular, oscillations arise because of nonlinear feedbacks between different interacting components of the social system (state-level society).”

with a nice chart:

fuck wordpress and the blocks editor, BTW, when a platform interface becomes baroque for some dynamics clear only to the programmers it’s probabluy time to move, it used to be easy to add an image, no longer

Forecasting with fat tailed distro

Random variables in the power law class with tail exponent α ≤ 1 are, simply, not forecastable. They do not obey the LLN. But we can still understand their properties.”

“If one claims fitness or nonfitness of a forecasting ability based on a single observation = 1, she or he would be deemed to be making an unscientific claim. For fat tailed variables that “= 1″ error can be made with n = 106. In the case of pandemics, n = ∞ is still anecdotal. (..) It takes 1014 observations for a “Pareto 80/20” (the most commonly referred to probability distribution, that is withα ≈ 1.13) for the average thus obtained to emulate the significance of a Gaussian with only 30 observations.”

https://forecasters.org/blog/2020/06/14/on-single-point-forecasts-for-fat-tailed-variables/

Taleb justifying the precautionary principle on statistcis ground, in a challenge with Ioannidis who called for reopening the economy based on poor data

https://forecasters.org/blog/2020/06/14/covid-19-ioannidis-vs-taleb/

 

From Trolley to Mechanical Ventilator

how “problems” change over time, one day everybody is musing on a robot car who (that) must choose who to kill, then a small rna virus arrives and everybody turns to the problem of mechanical ventilators, except that not, nobody wants to acknowledge that in the Covid19 epidemics thousand of critical patients are subject to rationing life/death decisions based of a simple rule or a more complex clinical evalution algorithm? And the dilemma goes: you save a 60-yearld old man in perfect shape of a 35-year old pregnant woman with breast cancer ?

Facing Covid-19 in Italy — Ethics, Logistics, and Therapeutics on the Epidemic’s Front Line

New England Journal of Medicine has a retrospective on the ICU crisis in Italy where decisions around scarce mechanical ventilators are actually done, at time of writing over 4,000 people dead and this charts show the problem in stricking clarity