NuclearPhynance Archive

I recently ran into this one:

http://www.debunkingeconomics.com/Papers/Econophysics/GallegattiKeenLuxOrmerod2006WorryingTrendsInEconophysics_PhysicaA370pp1-6.pdf

and here the "alleconomicsaredumbscrewthatfinancestuff" answer by Joseph L. McCauley:

http://arxiv.org/ftp/physics/papers/0606/0606002.pdf

I am just courious about your opinion..

Only skimmed them.  Sounds like they deserve each other.  The first is mind-numbingly badly written, all too typical of current economists and only looks good by comparison to the undercooked tripe in the American Economic Review.  The second is by one of those unfortunately too common idiots who believe once they get a physics degree they can stop learning cause they know everything already.  The world is a lesser place for their existence.  Just my 2c.

[i]"The second is by one of those unfortunately too common idiots who believe once they get a physics degree they can stop learning cause they know everything already."[/i]



McCauley doesn't seem to like economists very much, because they don't use Green's functions. I read one of his papers about how utility is a silly basis for economic law. He's trivially right that it's silly when applied to, say commodities (which is all he talks about in the paper). But then, nobody applies that kind of utility (aka take the derivative of a utility distribution to get price) to commodities. Duh.

I have a lower opinion of him than you do.  Skimming the first few pages of that paper, he literally does not seem to know the difference between economics and econometrics.  He seems to be saying econometrics when he means economics.  Econometrics is completely agnostic to the idea of utility maximization.  He doesn't know the terms but he's sure he has something to say.

And the biggest hole for me is.....



They both assume that what we know now captures reality in some sort of numbers on a time series.



errrr, ahhhhh.



History really doesn't support this assumption or conclussion. One of the most fruitful areas for History PhDs is finding old data sets that tell us a different economic story thaan what we previously knew was true.



How can these two super-geniuses assume that what we know *now* is adequate to dismiss whole fields of inquiry? I'm pretty much done with astrology, but it still clings to some people and informs their decision making (and hence, utility). Mrs. Ronald Reagan was one (yikes!).



And ditto on the confussion between econometrics, a technique, and economics, a field of inquiry.



[edit]



I'd add that conversations here are at a better level, with less talking past each other, and solid respectful (and funny) peer-to-peer correction.

Did anybody read his book?

here

I started to read it, but he was another one of those physicists who never tires of talking about how much smarter he is than the rest of us. I read Bouchaud and Potters instead, and enjoyed it.

Yepp...I think these two guys are pretty cool...and both of them work outside of the academic ivory tower at times...which you can't say about mccauley...on the other hand, I am just not ready to call him a fool...in my opinion, he is right on a lot of things, and he is a lot smarter than me, so who am I to judge him? I don't have the time to read his stuff the way you should read things you are not yet familiar with (means a lot of cross reading of references and even looking at data on your own sometimes), so I am not allowed to talk bad about it anyway.

At least he provides another opinion and is more than ready to discuss it. I regard those type of guys as an enrichment.