as described in my latest book.
One of the things I noticed late in the formatting stage of the book is that I did not give a detailed explanation of the algorithms that generate the equations. This was not entirely an oversight: I wanted the book to be survive updates to the code, and the equation generation algorithms are a target for a major refactoring. This article explains the current situation, and how it developed. The need for an easily extensible equation generation algorithm trumped the desire for formality. The structure of SFC models makes extremely formal procedures fairly brittle.
Sunday, December 10, 2017
Saturday, December 9, 2017
Wednesday, December 6, 2017
Sunday, December 3, 2017
Mainstream mathematical economics has a very strong influence from optimal control theory. As I discussed previously, optimal control was abandoned as a modelling strategy decades ago by controls engineers; it only survives for path-planning problems, where you are relatively assured that you have an accurate model of the overall dynamics of the system. In my articles, I have referred to robust control theory as an alternative approach. In robust control theory, we are no longer fixated on a baseline model of the system, we incorporate model uncertainty. These concepts are not just the standard hand-waving that accompanies a lot of pop mathematics; robust control theory is a practical and rigorous modelling strategy. This article is a semi-popularisation of some of the concepts; there is some mathematics, but readers may be able to skip over it.
Saturday, December 2, 2017
Wednesday, November 29, 2017
In this article, I give an example of an abject failure of parameter uncertainty as a notion of model uncertainty.
Sunday, November 26, 2017
My previous conjecture about full employment arguments -- has a wide range of implications. At this point, I am unsure about the generality of the argument; it is clear that we have some classes of models where J* does not exist; is it as wide as I think? Under the working assumption that the proof technique is indeed correct, the natural rate of interest looks like it is also in theoretical trouble. In the class of models studied, it is not too hard to demonstrate that the "natural" rate of interest is entirely determined by a fiscal policy decision: indexation policy.