Showing posts from August, 2017

A random physicist takes on economics

Jason Smith, a random physicist, has a new book out where he takes aim at some of the core foundations of microeconomics. I encourage every economist out there to open their mind, read it, and genuinely consider the implications of this new approach.

Go get it now. It only costs a few bucks.

So what do I think? His approach is exactly what economics needs - a set of fresh eyes on the basics.[1]

The book is, fundamentally, an introduction to Smith's new view of what I would call ‘microeconomics as the emergent characteristic of random agents in constrained situations’. Or, more simply put, why you don’t need rational decision-makers for a useful economic theory that makes good predictions.

To get some sense of why this is important, economists are often criticised for getting the big picture stuff of macroeconomics wrong, like missing the financial crisis. But in reality, the economic micro-level stuff, about responding to relative prices, making choices based on incomes and preference…

Economic bandits

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A string of successful Game of Mates speaking events has happened recently -- in Kuranda, Sydney, Canberra, and Melbourne. I can't take all the credit. But, James, our bandit in the Game of Mates, can. He has been extremely active all across the land and people are starting to notice.

One issue that has repeatedly come up at these events is the rise of 'strategic representation' of the economic benefits of major projects in planning applications. For example, a land subdivision proposal might include plans for a new university campus, eco-tourism facilities, and more, in order to be able to claim the project will generate billions of dollars of economic benefits to the region. But the reality is often that these additional facilities are completely infeasible and will never happen. They are just included in the application to beef up the claimed merits of the project, for there is no obligation from the approval to follow through with the ful…