Re: [OPE-L] Incoherence of the TSSI - consensus?

From: glevy@PRATT.EDU
Date: Tue Oct 23 2007 - 08:32:16 EDT

> There is much to be said for simulations since these force one
> to put forward explicit mechanisms for events, rather than
> assuming the results of dynamical processes.
> What vitiates Klimans approach is that although it is presented
> as being dynamical, it actually provides not mechanism by which
> one of its main dynamic effects - an equalisation of profit
> rates is to be achieved.
> As Ajit noted in a post a month or so ago, it is actually very
> hard to specify any dynamical process that would produce such
> an equalisation. As far as I know there are know simulation models
> that produce it as a result as opposed to assuming it.

Hi Paul C:

I know of no economist who specializes in the field of non-linear
dynamics who accepts the claim that TSSI models (or "illustrations")
are in fact dynamic.  Steve K has challenged them on this issue as
has Barkley Rosser.  They were challenged to "walk the walk" and
actually present dynamic models well over a decade ago but have not
risen to the challenge.  The underlying problem here is that they
want to cross-fertilize models developed in  the context of "period
analysis" with dynamic models without recognizing the inherent
(non-dynamic) limitations of the former. In this sense, I think they
*actually* present a model of comparitive statics similar to the
1970's Lowe (_The Path of Economic Growth_) and Hicks (_Capital & Time_)
tradition. I.e. Lowe and Hicks also saw growth as a dynamic process
but were unable to formally express that insight in their theory and
present a truly dynamic model.  Of course, non-linear dynamic theory has
progressed a long ways since Hicks and Lowe wrote their books. In any
event, although they saw growth as dynamic they were still expressing
themselves in terms of equilibrium theory, steady-states, etc. For
instance, the Lowe model incorporates a "dynamic equilibrium" process.
This contrasts at least to the rhetoric of the TSSI.  But, actual dynamic
theory requires more than lip service and rhetoric - as any genuine
non-equilbrium dynamic theorist will tell you.

In solidarity, Jerry

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