January 13, 2008
Arnold Kling
Tyler Cowen discusses what he sees as some of the most interesting findings of the past year in economics.
The common thread in these various discoveries is a careful use of data and an interest in real-world problems and puzzles. In accord with the trend in the profession since the 1990s, there haven’t been many significant advances in pure theory over the last 12 months.
Read the whole column.
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CATEGORIES: Economic Methods (95)
12 months is a short period of time.
I did a scan of the Journal of Econometrics for the latest research one the conditions of equilibria in a square integrable aggregate economic model. I think we will soon have a theoretical result of some importance.
My prediction:
Some economist, somewhere, will prove that in any integrable aggregate economic model of the types we deal with, the following is true.
Any agent model that assigns the agent the ability to estimate the aggregate economic yield will have no equilibrium points.
In other words, if we all try to outperform the aggregate population, the economy will be unstable.
The latest reference to this possibility was in a 2007 paper, sorry I keep bad notes.
