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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (17337)	2/15/2004 1:27:59 AM
From: Ali Chen	Read Replies (1) \| Respond to of 306849

This is a very pessimistic point of view indeed, even more pessimistic than I usually am <GGG> "letting the market take it's natural course." I don't know much about economics, but from what I've heard/learned, "natural" unconstrained economics tends to be globally unstable, but maybe my impression came from too much of mandatory "classic Maxism-Leninism" courses <g>. "The current schools of "free market economists" believe the "free market" requires their constant intervention and attention." IMHO, it depends how to look at it. Since I believe that the unconstrained free economics is unstable, a set of artificial (preferrably simple) rules must be imposed, in a form of "boundary conditions". Since the system is too complex, no one knows for sure about what these conditions has precisely to be for optimal and stable progress. Therefore the only method to uncover these "optimal" but simple restraining conditions is to change them slightly, and constantly monitor the output hoping that the control input was not too strong to kick the state (of economy) out of its current basin of attraction. This would be my wishful interpretation of actions of "current school of free market economists" "Milton Friedman and his Monetarist monkeys claim you can fix the problem with more money supply and low interest rates." These two control parameters seems to be simple and global enough and clearly have an impact on general dynamics of economical behavior. However, it is possible that they alone are not sufficient to provide system's stability, or the rate (and amplitude) of control changes are inconsistent with the system inertia. This is all my humble theories of course, based on some concepts of physics and mathematics of multi-dimensional nonlinear systems. I hope there are much more knowledgeable people who are working on similar concepts with direct applications to economics.