A Primer on the Tools and Concepts of Computable Economics

Computability theory came into being as a result of Hilbert's attempts to meet Brouwer's challenges, from an intuitionistc and constructive standpoint, to formalism as a foundation for mathematical practice. Viewed this way, constructive mathematics should be one vision of computability theory. However, there are fundamental differences between computability theory and constructive mathematics: the Church-Turing thesis is a disciplining criterion in the former and not in the latter; and classical logic - particularly, the law of the excluded middle - is not accepted in the latter but freely invoked in the former, especially in proving universal negative propositions. In Computable Economic an eclectic approach is adopted where the main criterion is numerical content for economic entities. In this sense both the computable and the constructive traditions are freely and indiscriminately invoked and utilised in the formalization of economic entities. Some of the mathematical methods and concepts of computable economics are surveyed in a pedagogical mode. The context is that of a digital economy embedded in an information society

The Mystery of Capital and the Construction of Social Reality

John Searle’s The Construction of Social Reality and Hernando de Soto’s The Mystery of Capital shifted the focus of current thought on capital and economic development to the cultural and conceptual ideas that underpin market economies and that are taken for granted in developed nations. This collection of essays assembles 21 philosophers, economists, and political scientists to help readers understand these exciting new theories

Disequilibrium Dynamics with Inventories and Anticipatory Price-Setting:Some Impirical Results

The basic assumption of this paper is an attempt to be specific about price formation while retaining a fixed-price, quantity-constrained equilibration in the short-run. The second theme of this paper is the role of inventories in macrodynamics a topic of long-recognized importance, but one which has not received much attention within the disequilibrium literature. We will analyze how the level of inventories interacts with the level of prices and wages, and how the spillover effects in a fixed-price equilibrium produce certain testable characteristics in macro time series data. We will argue that these can be used to discriminate between a model of the type we study and the analogous flexible-price system. In section 2 we set out the basic model and discuss its assumptions. Section 3 derives the short-run quantity-constrained equilibrium as it depends on initial inventory stocks and on the random disturbances within the period. Section 4 presents, for comparison purposes, the analogous results under conditions of full price flexibility after these shocks are realized. Sections 5 and 6 are the heart of the paper. We first derive the probabilistic nature of the equilibrium as it depends upon the underlying stochastic disturbances. The probabilities of different types of quantity constrained equilibria can be compared. Then, we use these results to present the dynamics of inventory behavior and the statistical relationships between real wages, inventories and employment. We emphasize the possibility of using this type of analysis to test the disequilibrium hypothesis with anticipatory pricing, against the market-clearing assumptions.

Against the possibility of a formal account of rationality

I analyze a recent exchange between Adam Elga and Julian Jonker concerning unsharp (or imprecise) credences and decision-making over them. Elga holds that unsharp credences are necessarily irrational; I agree with Jonker's reply that they can be rational as long as the agent switches to a nonlinear valuation. Through the lens of computational complexity theory, I then argue that even though nonlinear valuations can be rational, they come in general at the price of computational intractability, and that this problematizes their use in defining rationality. I conclude that the meaning of "rationality" may be philosophically vague

Disequilibrium Dynamics with Inventories and Anticipatory Price-Setting

This paper studies the sequence of short-run quantity-constrained equilibria of a model with a single storable output, labor and money. The durability of output gives rise to inventory fluctuations which influence the course of the equilibria attained. One special feature of interest is the assumption that prices are not at the level which would equilibrate all markets if there were no stochastic shocks to the economy. With prices frozen at this level, the nature of the realized shocks determines the type of disequilibrium realized and the unintended component of inventory change. The analysis concentrates on two questions: What is the statistical nature of the process governing the real wage, output, employment and inventories? And is it possible to test this model against the alternative hypothesis that prices are continually flexible even after the shocks have disturbed the system? We find that although these theories are similar in their qualitative structure, tests can be developed. We also show how the frequencies of different types of quantity-constrained equilibria vary with the stochastic specification. This may shed some insight on why it is commonly believed that some types of disequilibrium phenomena have not been observed.Economic