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Is All Economics Local? [pdf] (bankofengland.co.uk)
34 points by hunglee2 on May 12, 2019 | hide | past | favorite | 1 comment


haven't read the whole paper, but the single pendulum, double pendulum analogy caught my attention (took me back to grad school). they use it to talk about complex systems (like a double pendulum) arising rapidly from simple systems (2 single pendulums), which defies basic intuition about systems.

and then (on p.27)...

> "the very dimensionality of ABMs is striking. The largest in physics can now simulate interactions of up to 400 billion distinct particles at any one time."

and...

> "If the largest ABMs have a dimensionality greater than our population, why not model the economy at its highest possible resolution?"

so they use agent-based models (ABMs) (figure 2 is simcity!) to uncover unintuitive emergent behaviors underlying the highly complex system that is economics, things that just can't be understood with the simple macroeconomic models based on a few variables like GDP and inflation.




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