The essential point of economics is that we can get people to do a similar thing most of the time. Take walking up the stairs, we mostly use the same technique. In my view, that technique is to fire up a pacing counter the let your feet fly while phase locking to the edge of the steps. The key to the process: 1) We all agree to the step size uncertainty and 2) we all use the bounded function of walking. With that agreement the carpenter can produce stairwells. Walking up the stairs is part of going to the store for me, but we all go to the store the same way.
What is going on is that we partition the variations in life, then match partitions with Gibbs separation at the bounds. We agents likely can run 6-8 independent bounded function, if they are arranged as a channel (separated by by variation and rate).
So the economists would separate the commuting function from the work function. The economists can use the roadways as a dimension and study commutes, by intersection for example. He just gets one major variation of the economy, but gets that variation with great accuracy.
Consider Elliot waves. They make sense when constructed as trader attitudes because Elliot was partitioning by entropy and Elliot likely discovered commonly used bounded functions. But Elliot waves will also construct the trading rates and trading sizes, that is there are quants associated with bounded functions.
So in reading the literature, I see specialized economists using polynomial estimators for lightly traded goods. But they get better results when the goods are associated with another bounded function that is well known. For example, predicting the effect of price on highly regulated herbicides has difficulty with an illiquid market. However, since the herbicide follows an agricultural bounded function, the economists can correctly borrow information from other farming purchases to get rates and sizes. Thus he has an entropy measure of other goods and prices which he can compare with herbicide prices.
No comments:
Post a Comment