I think I'm following now. You're saying that the author is assuming a model of economies that is more complex than an actual economy. That could be the first time ever that I've heard such a thing about any model, let alone of an economy. :-)
The only assumption that I see him making is the weak form of the Efficient Market Hypothesis.
I'm curious...how do you feel about that hypothesis, anyway? I've thought the EMH was a pretty strange and obviously false hypothesis ever since I first heard of it in the 80s (in college).
Just look at this statement from the Wikipedia page on the subject: It is the assumption "...that prices on traded assets already reflect all available information, and instantly change to reflect new information." This is a flimsy foundation to build on, because it's assuming the instantaneous propagation of information between economic actors. By what mechanism? Quantum entanglement? Crazy action at a distance?
I realize it was probably first intended in the same way that one uses a point-mass in physics ("we know it can't exist, but it makes the math easier") but I don't think it's quite as harmless as that.
Anyway, I'm happy to see the author taking such a clever swing at it.
The only assumption that I see him making is the weak form of the Efficient Market Hypothesis.
I'm curious...how do you feel about that hypothesis, anyway? I've thought the EMH was a pretty strange and obviously false hypothesis ever since I first heard of it in the 80s (in college).
Just look at this statement from the Wikipedia page on the subject: It is the assumption "...that prices on traded assets already reflect all available information, and instantly change to reflect new information." This is a flimsy foundation to build on, because it's assuming the instantaneous propagation of information between economic actors. By what mechanism? Quantum entanglement? Crazy action at a distance?
I realize it was probably first intended in the same way that one uses a point-mass in physics ("we know it can't exist, but it makes the math easier") but I don't think it's quite as harmless as that.
Anyway, I'm happy to see the author taking such a clever swing at it.