Keen And Ormerod, Econophysics, And The Distribution Of Income | Review topics and articles of economics

Keen And Ormerod, Econophysics, And The Distribution Of Income

This humble blog is all about documenting fallacies in mainstream economics. Very little of what I have to say is new, and some have tried to popularize some of these criticisms. I think, in particular of Paul Ormerod (1994) and Steve Keen (2001). Ormerod and Keen have some similarities. Both:

Have written popular books (Ormerod 1994 and Keen 2001) explaining that neoclassical economics is incorrect
Mention Lipsey and Lancaster's theory of the second best
Emphasize that mainstream economists studying the theory of General Equilibrium have demonstrated the theoretical untenability of neoclassical economics
Recommend an approach to economics based on the mathematics of complexity theory
Publish original criticisms of mainstream economics first in their popular books (Ormerod 1999 and Keen 2001) and then later in a physics journal (e.g., Keen and Standish (2006) and Ormerod and Mounfield (2000))

They differ in that they express different opinions on Piero Sraffa in their popular books. Keen (2001) praises Sraffa, while Ormerod (1999) snarks.

I find that Ormerod and Keen have teamed up with two other authors for a recent paper (Gallegati et al. 2006). This paper contains an approving reference to Sraffa. A major theme of this paper is to question whether the evidence for power laws, in particular in the tails of certain distributions of certain economic variables, is as definite as seems to be claimed sometimes in the econophysics literature.

References

Gallegati, Mauro, Steve Keen, Thomas Lux, and Paul Ormerod (2006). "Worrying Trends in Econophysics", Physica A
Keen, Steve (2001). Debunking Economics: The Naked Emperor of the Social Sciences, Zed Books
Keen, Steve and Russell Standish (2006). "Profit Maximization, Industry Structure, and Competition: A Critique of Neoclassical Theory", Physica A
Ormerod, Paul (1994). The Death of Economics, London: Faber & Faber
Ormerod, Paul (1999). Butterfly Economics: A New General Theory of Social and Economic Behavior, Pantheon
Ormerod, Paul and Craig Mounfield (2000). "Random Matrix Theory and the Failure of Macro-Economic Forecasts", Physica A

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