Monday, February 7, 2011

Economists are starting to get channel theory

Led by this good work from  Hidalgo on product space.  HT M Thoma

His research is about networks of connections,  how product diversity is related to GDP, and that is related to network complexity. Eventually he will end up with the Levine construct, matching specialization with inventory risk along a finite production chain, otherwise known as channel theory. Great work, he is starting with complex data and working toward a yield curve type of solution.  He will want to ask, how many different combinations of a whole  can pass through a restricted channel, an entropy norm.

The economists are getting interested because they have finally figured out that economic space is sparse, quantized

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