"Lee Smolin on general equilibrium theory
He has written on inflation (ha-ha), so why not Arrow-Hahn-Debreu? The most interesting part of the paper starts here (p.29):
We can now turn finally to the role of gauge invariance in economics. The proposal that gauge theory is essential for making progress in economics was made by Malaney and Weinstein. I would now like to argue that there are deep and compelling reasons why the extension of economic theory to incorporate out of equilibrium behavior should centrally involve the kinds of gauge invariances they proposed.
Here is a short essay on gauge invariance. He also endorses agent-based modeling. I didn't "get" where this paper is headed (OK, you put in gauge invariance but comparative statics are still hard to predict a priori), but I'm always interested to see how top minds approach the foibles of the economic method.
I thank Michael F. Martin for the pointer.Posted by Tyler Cowen on March 2, 2009 at 12:58 PM"
I just want to thank you for this post. The paper is way above my pay grade, but that hasn't stopped me from thinking about it since you posted it, to the detriment to my other reading. I was going to post a comment on your F/F post, but I was still thinking about this post. I have a human agency approach to these problems, akin to behavioral approaches, so I'm going to try and use this approach for my own benefit. I hope that you do more of this. Take care, Don
Posted by: Don the libertarian Democrat at Mar 3, 2009 10:40:09 AM