Daily Archives: October 5, 2015

The smartest economist you’ve never heard of

BOOK REVIEW

Economics Rules, Author: Dani Rodrik.
The No Breakfast Fallacy, why the Club of Rome was wrong about us running out of resources, Author: Tim Worstall.

By Steven Pearlstein – “It was a humiliating lesson for the profession,” said Olivier Blanchard‘s IMF colleague Gian Maria Milesi-Ferretti.

The models were also based on an overly simplistic view of the financial system — not just how it works, but also the interplay between finance and the rest of the economy.

“We ignored the financial plumbing,” Blanchard said. “We thought we could model it with a few simple equations,” he explained, based on what turned out to be false assumptions about the ready availability of buyers and sellers and the easy substitution of one financial instrument for another.

Another problem was “linearity.” In nearly all macro models, the relationship between cause and effect is assumed to be regular and smooth — that for every X percent change in one thing, there is a Y percent change in another. more> http://tinyurl.com/ne8unu9

Related>

The future of the internet is flow

By David Gelernter and Eric Freeman – The web was a brilliant first shot at making the internet usable, but it backed the wrong horse. It chose space over time.

The conventional website is “space-organized,” like a patterned beach towel—pineapples upper left, mermaids lower right. Instead it might have been “time-organised,” like a parade—first this band, three minutes later this float, 40 seconds later that band.

Today, time-based structures, flowing data—in streams, feeds, blogs—increasingly dominate the web. Flow has become the basic organising principle of the cybersphere. The trend is widely understood, but its implications aren’t. more> http://tinyurl.com/q4m9xyb

Updates from GE

‘Digital Twin’ Technology Changed Formula 1 and Online Ads. Planes, Trains and Power Are Next
By Mark Egan – Winning a Formula 1 race is no longer just about building the fastest car, hiring the bravest driver and praying for luck.

These days, when a McLaren team races in Monaco or Singapore, it beams data from hundreds of sensors wired in the car to Woking, England. There, analysts study that data and use complex computer models to relay optimal race strategies back to the driver.

What’s the connection between racers and online shoppers? To GE Vice President of Software Research Colin Parris, it is clear. The McLaren race crew and the online retailers both harness data and use algorithms to make reasonable projections about the future, Parris explains. The concept is called digital twin.

“The opportunities of the digital twin are huge,” he says. more> http://tinyurl.com/nusklc3

The World Bank says giving money to entrepreneurs might be the best jobs program

By Tim Fernholz – The new study of this program led Columbia University political scientist Chris Blattman, who has studied micro-finance and individual grants, to wonder if this scheme was “the most effective development program in history.”

In Nigeria and other developing economies, however, there is still a dearth of investment for new businesses. “This [research] says hey, there are people out there you can identify through these competitions, and when you have given them money, it has a massive impact on a firm of that size,” David McKenzie said. more> http://tinyurl.com/pvp7xop