Episode 005: 12-Gauge Theory – OR – How the Delorean Can Save Economics

In This Podcast

  • What’s wrong with economics?
  • Is mathematics an appropriate tool for social science?
  • Vector bundles
  • The Delorean and it’s role in understanding typewriters.
  • The 12-Gauge shotgun approach to fixing economics!


Author: Nick Horton

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  1. Any models of economics have to take in consideration the somewhat predictable nature of people in power (ie government).

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  2. Tim Johnson, School of Mathematical and Computer Sciences Heriot-Watt University Edinburgh, is organising a workshop on gauge modelling in macro-economics. Interested parties should get in touch with him.

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  3. Some random thoughts:

    1. There is no #1.

    2. Holograms were invented BEFORE QFT!

    3. When you interact with a quantum particle you force it /to/ take a state based on how you measure. But, with economics, acting on the result of a measurement of a state, tends to push it /away/ from that state.

    4. This gauge theory for economics idea sounds neat, but how do you actually do it, when you have bajillionty dimensional vectors?

    Anyway, Thanks for the resource and I’ll take a look at the links. :-)

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  4. Calculus 2.1 Linear regression
    Used by a bunch of people who call themselves Econometricians

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  5. I would recommend the hosts read Hayek’s Fatal conceit or his ’74 Nobel award lecture. More bluntly, if it is fairly straightforward to use better maths to figure out how humans do or will behave, I have yet to see a mathematician ‘prove’ it in the financial markets where prices are, after all, determined by humans. Astrologers are never ‘wrong’, they just require us to believe we interpreted them incorrectly etc… but again, where are the wealthy astrolgoers? The only wealthy ones, like bankers, are those earning money from their promises.. rather than results.

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  6. Walras has left the building some time ago.

    These guys should update their knowledge instead of being stuck in outdated concepts. Imperfect competition, imperfect information, uncertainty, credit constraints, government, game theoretical behaviour, etc., etc. can all be found in modern general equilibrium models.

    Ignorance is bliss. They end up concluding with the Minnesota crowd which made the push for models being required to have quantitative predictions back in the early 90’s. These are the most “classical economics” people out there today, pushing for math AND quantitative predictions from models to test with the data.

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