Sunday, July 20, 2014

The fake 'time' variable and economics

The great quantum mechanical discoveries of modern physics was all about recognizing that the sample rate of light is a narrow but finite spectrum, not a dirac delta. Most of quantum mechanics is about sub atomic particles uncovering the ultimate spectrum of light and converting that spectra into degrees of freedom, balancing bandwidth among the possible motions. Economists have yet to begin this process.

Just like engineers, economists are stuck with customers who work in infinitely narrow bandwidths, called 'time'. Seasonal adjustments and periodic elections. Hence they are hopelessly stuck. They should take a hint from quantum physics. The entire issue of economics is how many queues (degrees of freedom) and how many events are pending in each queue. Take for instance inflation, economists always look for price changes over time (and so do I often). But the real issue is how large the price change per transaction. M2 Velocity is down, has been dropping, and recently accelerated its decline. There are not many queues and the queues we have are not well populated. Go back to your Poisson distribution and look at queue length vs the number of combinations that the economy is not executing. Fewer transactions pending in the queue, more things in the economy not being done. The economy is losing energy, and getting colder. It is equilibriating to a lower temperature.

The Efimov state, for example: 
 It is derived assuming the engineering approximations, for convenience. The resulting spectrum will show asymmetry. But quantum physicists know the resulting quants that support triangular configurations result from the residual asymmetry in the spectra of sample rates, after symmetry has been removed for spin.

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