| | Fred,
The original Marshallian SD curves were, of course, static.
Moreover, the assumption that Pareto opthomality is best achieved as a stasis relies on a model called 'Nash equiilibrium'.
So-called 'dynamic equilibrium' is the movenent of SD to an optimal state.
This follows a thermodynamic assumption that, to many seems a bit awkward.
Real world-dynamics are commonly expressed, again, as 'random walk'. The equation is called 'Euler' because he was the guy who created a mathematical link between Bernouilli's probability and 'flow' over time, a long time ago
And yes, I'm aware that engineers use Euler, too.
In other words, it's how one decision effects all future decisions. People are assumed as 'particles' because the scope of their decisions are circumscribed.
Again, Lucas' criticism was that people sometimes take giant steps, which correspond to Levi. Yet again, Levis can be integrated into post Euler modeling.
As an aside, Feynman's expose of the O-ring disaster revealed that the engineers were well aware of the liklihood of a statistically 'rare' event, to the order of 1 in 200. Also, lebvis are now taught in most finamce classes....
Units of calibration are given as prices.
In any case, you are somewhat correct in suggestiong that the methodology used by economists to select their maths are 'Babylonian', pick and choose. Feynman said as much for physics. Feynman went on to say, in this regard, that it's impossible for any science to emply the axiomatc, 'Greek' metod of deduction from first principles. That's because nature doesn't tell us what these 'first principles are.
So perhaps Feynman was a cargo-cult Druid, too?
Economists use Euler because the math seems to fit two common observations--
a) people make decisions based upon probable outcomes
b) past outcomes effect future expectation, therefore future outcomes.
....and a third observation that was the subject of the paper, the liquidity trap, or pushing on a string.
Now all three observations are assumptions with which you're free to disagree in ways, hopefully, more fertile than labeling them 'voodoo'.
Likewise, you're free to say, Euler-based maths has failed to describe the phenomena in question..dynamic as it might be as a model.
Finally, you can say that no maths fit economics because, although we know that math is the language of all sciences, economics as such isn't a science.
At that point, you'll be hitting a rather stiff epistemological roadblock.
Either you'll be saying that economics does not describe real, objective events (the definition of science qua science), or else you'll be offering a case for ecomomics that grants it 'special' epistemological status of no math, purely descriptive.
The later, IMHO, sounds somewhat like a virgin birth...voodoo/ druid incantations, or cargo culters awaiting delivery, as it were.
Eva
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