Ergodic Axiom: The Ontological Mistakes in Economics

• Authors: Ladislav Andrášik
• Languages of publication: EN

Abstracts

EN

There are several ontological and consequently also methodological mistakes in contemporary mainstream economics. Among them, the so-called ergodic axiom is play significant role. It is understandable that the real economy elaborated as formalized mental model looks like dynamic system on first sight. However, that is right only of dynamical systems in mathematical formalism. Economy that is in our understanding societal and/or collective economy is complex evolving organism. If we imagine such organism in the form of dynamical system that is as clear mathematical formalism, we are losing their crucial authentic character. The significant irredeemable attribute of societal economy is lying in his complex evolving network process character created by large population of people with different decision-making and complex realizing among them. Going from these imaginations the two entities in a question that is dynamical system with their ergodicity and societal economic organism as complex evolving network are qualitative very different ones. That is the reason why we cannot accede with endeavours to draw on living economy straitjacket of ergodic axiom. To articulate that cause by other words ergodic dynamical systems are applicable for physical and partly for chemical entities and only scarcely are fit for living organisms. On the other hand however, as clear method the ergodic dynamical system have good applying for didactical approaches in economics where helping in better understanding some types of complexities in dynamics. The purpose of that essay is to discuss problems around usability of ergodic dynamical system theory and methods in economics in the age of advanced ICT knowledge based society.

Keywords

EN

canard phenomenon; dynamical system; ergodicity (ergodic); experimentation in virtual laboratory

• Publisher: Sciendo
• Journal: Creative and Knowledge Society
• Year: 2015
• Volume: 5
• Issue: 1
• Pages: 47-65

Dates

published

2015-07-01

online

2016-02-16

Contributors

author

Ladislav Andrášik

• European Polytechnic Institute, Kunovice, Czech Republic, Osvobození 699, 686 04 Kunovice

References

• Andrášik, L., (1999). Economy challenging the third millenium (The potency of a non-conventional modeling of the economy), Economic Journal/Ekonomický časopis, 47 (5), p. 671.
• Andrášik, L., (2006). Experience with Digital Story-telling in Social Sciences Education, Proceedings of the 7th International Symposium on Computational Intelligence, Hungarian Fuzzy Association, Budapest.
• Andrášik, L., (2004). The Theory of Computer-aided Experimentation in an Artificial Economy - Some Unconventional Approaches to Simulation of Models of Economical Evolution and to Experimentation in Successive Environment, Economic Journal/Ekonomický časopis, 52, No. 8, p. 996.
• Chiarella, C. Dieci, R., Gardini, L,. (2001). Asset Price Dynamics in a Financial Market with Fundamentalists and Chartists, Discrete Dynamics in Nature and Society, Vol. 6, Issue 2, pp. 69-99.
• Feller, W., (1971). An introduction to probability theory and its applications, vol. 2, Wiley.
• Georgescu-Roegen, N., (1971). The Entropy Law and the Economic Process, Cambridge, MA: Harvard University Press.
• Haken, H., (2000). Information and Self-Organization: A Macroscopic Approach to Complex Systems. Second edition. Berlin: Springer-Verlag.
• Hannon, B., Ruth, M., (1997). Modeling Dynamic Economic Systems, Springer-Verlag, New York. Hicks, J. R., (1950). A Contribution to the Theory of the Trade Cycle, Oxford University Press, Oxford.
• Hicks, J., (1979). Causality in Economics, Blackwell, Oxford. Holland, J. H., (1975). Adaption in Natural and Artificial Systems. 1992. Cambridge, MA: MIT Press.
• Holland, J.H., (1998). Emergence. From Chaos to Order. Reading, MA: Addison-Wesley.
• Mira, C., Shilnikov, A., (2005). Slow-Fast Dynamics generated by noninvertible plane maps, International Journal of Bifurcation and Chaos, Vol. 15, No. 11, pp. 3509-3534.
• Nelson, R. R. & Winter, S. G., (1982). An Evolutionary Theory of Economic Change. Cambridge, MA: Belknap Press of Harvard University Press.
• North, D. C., (1990). Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.
• North, D. C., (2005). Understanding the Process of Economic Change. Princeton, NJ: Princeton University Press.
• Puu, T., Gardini, L. and Sushko, I., (2004). A Hicksian multiplier-accelerator model with floor determined by capital stock, Journal of Economic Behaviour and Organization, forthcoming, 56, pp. 331-348.
• Puu, T., Gardini, L., Sushko, I., (2010). Regular and chaotic growth in a Hicksian floor/ceiling model, Journal of Economic Behavior & Organization, vol. 75, pp.77-94.[WoS]
• Samuelson, P. A., (1969). Classical and Neoclassical Theory. In: Monetary Theory, edited by R.W. Clower, Penguin Books, London.
• Samuelson, P. A., ([1939], 1966). Interaction between the Multiplier Analysis and the Principle of Accelerations, (Chap. 82, in: The Collected Scientific Papers of P. A. Samuelson, Vol. 2 Cambridge, MIT Press.
• Westerhoff, F. H., (2006). Samuelson’s multiplier-accelerator model revisited, Applied Economics Letters, vol. 13, pp. 89-92.
• Witt, U., (2003). The Evolving Economy: Essays on the Evolutionary Approach to Economics. Cheltenham, UK: Edward Elgar.
• Witt, U., (2004). On the proper interpretation of ‘evolution’ in economics andit’s implications for production theory. Journal of Economic Methodology 11:2, pp. 125- 126.
• Witt, U., (2006). Evolutionary Concepts in Economics and Biology. Journal of Evolutionary Economics, 16, pp. 473-476.[Crossref]
• Zeeman, E. C., (1974). On the unstable behaviour of stock exchanges. Journal of Mathematical Economics 1, s.39-49.
• Ziman, J., (2000). Technological Innovation as an Evolutionary Process. Cambridge, MA: Cambridge University Press.

Identifiers

DOI

10.1515/cks-2015-0005