The Limits of the| by Andrew Rowson, supervised by Prof. A.R.Champneys | ||
| Home A Dismal Science Economic Theory Classical Neoclassical Keynesian Cycles and Crises Measuring cycles Economic Time Series Data Processing Spectral Analysis Cycle Modelling Kaldor's Trade Cycle A Kaldorian model Conclusion Full Report |
Introduction
A Dismal Science
Economics has laboured under the label of the
Dismal Science ever since the
term was coined by the Victorian historian Thomas Carlyle suggesting that
economics is a derivative science and impoverished in terms of ideas.The
growing interest and advances in the study of nonlinear dynamical systems
has been fuelled by developments in computer technology since the 1970's.
The world, including that of economics, is an inherently nonlinear
place and Stanislaw Ulam is said to have remarked that even to refer to
nonlinear science was
like defining the bulk of zoology by calling it the study of non-elephant
animals. Economics would seem to be an area of study that might have
benefitted especially from these advances yet it has been criticised for
being slow to adopt new ideas.
Like the weather, it hard to predict the state of economic variables in anything other than the near future. Yet short term weather forecasting continues to improve, a three day forecast today, for example, is more accurate than a one day forecast was in 1980. This is due, at least in part, to the use of nonlinear modelling techniques. The failures of economists are well documented and will no doubt ensure that the dismal label continues to stick. The following example comes from the External Relations Department of the International Monetary Fund (IMF); "Quite simply, the record of failure to predict recessions is virtually unblemished." |
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