tag:blogger.com,1999:blog-17908317.post2556319987139272974..comments2024-03-28T03:15:14.875-07:00Comments on Unenumerated: Political bubblesNick Szabohttp://www.blogger.com/profile/16820399856274245684noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-17908317.post-89298752374872677942008-05-17T16:50:00.000-07:002008-05-17T16:50:00.000-07:00NickI've never thought of academic fads as bubbles...<B>Nick</B><BR/><BR/>I've never thought of academic fads as bubbles, but it makes perfect sense and explains a lot. Thanks.<BR/><BR/><B>Michael</B><BR/><BR/>I'm not familiar with "Coupled, damped, driven harmonic oscillators," but if the problem with supply/demand curves is that they're just a snapshot of a single time, why not add an extra dimension?Byrnehttps://www.blogger.com/profile/01811615997458838025noreply@blogger.comtag:blogger.com,1999:blog-17908317.post-57788811427554041872008-05-17T16:35:00.000-07:002008-05-17T16:35:00.000-07:00Nick,I completely agree that the use of past data ...Nick,<BR/><BR/>I completely agree that the use of past data cannot be a reliable basis for predicting the long-term future.<BR/><BR/>But it seems beyond argument that if we could come up with some better economic models for markets, we should.<BR/><BR/>For decades some have been arguing that the supply and demand curves always on economists' minds are static models of a dynamic world. <BR/><BR/>The way forward is to start with a simple dynamic model for supply and demand from which the usual supply and demand curves are a subset for a particular window in time. Coupled, damped, driven harmonic oscillators provide just such a model. It's easy enough that even non-physicists could figure it out pretty quickly. And the only givens you need to get business cycles, bubbles, and stagnation are scarcity and the existence of a substitute, liquidity, external money supply, and transactions costs. No theory of psychology needed.<BR/><BR/>We should be toying around with this stuff. We've been living in a static world for too long.<BR/><BR/>See http://brokensymmetry.typepad.com/broken_symmetry/2008/05/beyond-econ-101.htmlMichael F. Martinhttps://www.blogger.com/profile/15279501532684851571noreply@blogger.com