Re: zero average profit

From: Ian Wright (ian_paul_wright@HOTMAIL.COM)
Date: Mon Jun 16 2003 - 18:02:37 EDT

Hello Paul,

>The conclusion I draw from this is that although stochastic
>and statistical models have to be the way to go, one must
>be very cautious about imposing conservation principles
>on them if they are to be:
>a) internally consistent
>b) plausible as models

I am listening, and note your word of caution. I agree that
institutions do regularly violate the conservation of money.
But assuming, say, a fixed population size and a fixed amount
of money, and abstracting from state control of the money
supply and fractional reserve banking, is another way to slice
the cake, just like, for example, the Sraffian model abstracts
from money and assumes a fixed number of commodity
types, or the classical assumption that prices correspond to
values, or the "law of one price" and so on. Holding some
things constant simplifies the analysis, as I'm sure you're well

You mentioned possible links between quantum mechanics
and models that do not assume conservation of money.
That was a good thought because the following paper
embodies that idea:
It may interest you because it explicitly considers double-entry
bookkeeping, and allows monetary transfers to lead to
"particle creation or annihilation" via an analogy the author
calls "bookkeeping mechanics".


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