The following is also relevant in relation to Keynes-vs-Hayek. It is a word doc, so one has to change the fonts (once you've downloaded it) into a size that will enable you to read, since it is hard to read because of its smaller size.
The Risk vs Uncertainty interpretation of Keynes and Hayek discussed by Prof. Barkley Rosser in his article above on Between Cambridge and Vienna is covered in the following paper from a different angle. It is only accessible to those who are subscribed to that journal but I do have a PDF copy of the paper if anyone is interested and can get it from PC. I can send him a copy for anyone who will request it.
Abstract: ------------- The objective of this paper is to provide a methodological link between econophysics and economics. I will study a key notion of both fields: uncertainty and the ways of thinking about it developed by the two disciplines. After having presented the main economic theories of uncertainty (provided by Knight, Keynes and Hayek), I show how this notion is paradoxically excluded from the economic field. In economics, uncertainty is totally reduced by an a priori Gaussian framework—in contrast to econophysics, which does not use a priori models because it works directly on data. Uncertainty is then not shaped by a specific model, and is partially and temporally reduced as models improve. This way of thinking about uncertainty has echoes in the economic literature. By presenting econophysics as a Knightian method, and a complementary approach to a Hayekian framework, this paper shows that econophysics can be methodologically justified from an economic point of view.
The following is recent, so it is an interest reading. Avoid the mathematical derivations in the "Methods" section. Start with "Abstract", then to "Introduction", then "Results" then finally to "Discussion" sections.
There is another paper (independent & different authors from the authors of the paper quoted above) that I will post later which pointed out the same scenario as the one above. That is the recent financial collapse started just after the dot-com bust of the early 2000s. That paper is littered with formula derivations but the introduction section is easily understood, since no derivation is presented.
The authors of the following paper (see link at the end) claimed that:
... several main causes contributed to the current economic crisis: underestimation of systemic risk, systemic insolvency and liquidity shortage were the reasons for the sudden systemic collapse. Scholars who are perceived to be mainstream economists gave different explanations about financial crisis in general (Lucas 1972, Friedman 1981, Bernanke 1983), and the causes of the current one in particular (Krugman 2009, Blanchard 2009, O’Grady 2009—interview to Gary Becker).
The authors also stated that:
In the case of the current crisis, the seeds for the critical collective unstable state were already sown at the beginning of 2000 during the dot-com crisis and the consequent crash of the individual stock market indexes.
Interesting sections to read from the article are:
- Abstract - 1. Introduction- 2.1. Economic distress contagion in terms of autocatalytic percolation - 6. Conclusions
Avoid other sections as they're targeted for researchers (economist, physicist, mathematician, etc,...) who have mathematical backgrounds.
6 comments:
The following may be of interest to some here.
The Effects of Entropy on Unemployment and Inflation
I'll add the following as well (including my first message which disappeared).
Market Bubbles and Crashes
The following is also relevant in relation to Keynes-vs-Hayek. It is a word doc, so one has to change the fonts (once you've downloaded it) into a size that will enable you to read, since it is hard to read because of its smaller size.
BETWEEN CAMBRIDGE AND VIENNA: THE RISKY BUSINESS OF NEW AUSTRIAN BUSINESS CYCLE THEORY
The Risk vs Uncertainty interpretation of Keynes and Hayek discussed by Prof. Barkley Rosser in his article above on Between Cambridge and Vienna is covered in the following paper from a different angle. It is only accessible to those who are subscribed to that journal but I do have a PDF copy of the paper if anyone is interested and can get it from PC. I can send him a copy for anyone who will request it.
Abstract:
-------------
The objective of this paper is to provide a methodological link between econophysics and economics. I will study a key notion of both fields: uncertainty and the ways of thinking about it developed by the two disciplines. After having presented the main economic theories of uncertainty (provided by Knight, Keynes and Hayek), I show how this notion is paradoxically excluded from the economic field. In economics, uncertainty is totally reduced by an a priori Gaussian framework—in contrast to econophysics, which does not use a priori models because it works directly on data. Uncertainty is then not shaped by a specific model, and is partially and temporally reduced as models improve. This way of thinking about uncertainty has echoes in the economic literature. By presenting econophysics as a Knightian method, and a complementary approach to a Hayekian framework, this paper shows that econophysics can be methodologically justified from an economic point of view.
Economic uncertainty and econophysics
The following is recent, so it is an interest reading. Avoid the mathematical derivations in the "Methods" section. Start with "Abstract", then to "Introduction", then "Results" then finally to "Discussion" sections.
Index Cohesive Force Analysis Reveals That the US Market Became Prone to Systemic Collapses Since 2002
There is another paper (independent & different authors from the authors of the paper quoted above) that I will post later which pointed out the same scenario as the one above. That is the recent financial collapse started just after the dot-com bust of the early 2000s. That paper is littered with formula derivations but the introduction section is easily understood, since no derivation is presented.
The authors of the following paper (see link at the end) claimed that:
... several main causes contributed to the current economic crisis: underestimation of systemic risk, systemic insolvency and liquidity shortage were the reasons for the sudden systemic collapse. Scholars who are perceived to be mainstream economists gave different explanations about financial crisis in general (Lucas 1972, Friedman 1981, Bernanke 1983), and the causes of the current one in particular (Krugman 2009, Blanchard 2009, O’Grady 2009—interview to Gary Becker).
The authors also stated that:
In the case of the current crisis, the seeds for the critical collective unstable state were already sown at the beginning of 2000 during the dot-com crisis and the consequent crash of the individual stock market indexes.
Interesting sections to read from the article are:
- Abstract
- 1. Introduction- 2.1. Economic distress contagion in terms of autocatalytic percolation
- 6. Conclusions
Avoid other sections as they're targeted for researchers (economist, physicist, mathematician, etc,...) who have mathematical backgrounds.
Download : When the collective acts on its components: economic crisis auto catalytic percolation
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