The Deterministic Counter-Revolution: Chaos Theory-Origins and Applications in Economics

摘要: To accept chaos theory within the fold of econometrics, one must first understand history neoclassical economics. Most economists that, rightly or wrongly, research program has striven, in a manner worthy Faust himself, to attain status science, and not just any but that most respected modern sciences: physics; goaded on by Mephistopheles form ubiquitous handmaiden all mathematics. Yet many realize depths which founders neoclassicism plumbed order secure status. Indeed, Mirowski (1989) argued, rather controversially, during so-called Marginalist revolution 1870s, attempts such as Jevons, Walras, Edgeworth, Pareto Fisher were primarily directed towards enlisting notion classical determinism provide scientific explanation for their programmes largely concerned with utility maximization. Consequently, when it came actual mathematics, work dealt variational, than conservation, principles which, being governed static theory, severely vitiated quest dynamic doctrine could claim effectively parallel determinist doctrine. The legitimacy this program, was based belief determinism, seriously jeopardized physicists themselves began challenge its intellectual validity. By 1919, suggesting statistical laws be regarded concept higher even laws. Max Born's interpretation 1926 formalisms new quantum mechanics explicitly irreducibly stochastic, well Heisenberg's 'Uncertainty Principle' thought support nearly propositions physics, caused widespread speculation amongst had become untenable future physics lay concepts. Thus, found itself impaled upon horns dilemma. Their commitment maximization irrevocably linked up stance equating causality prediction. Moreover, quantitative empirical programs either shackled unnecessary rigours techinques rendered suspect result undue flexibility accorded determinism. hand, conformity data mechanistic model considered de rigueur prior acceptance model. On other time series prediction original economic