{"id":7606,"date":"2015-04-26T16:07:01","date_gmt":"2015-04-26T21:07:01","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7606"},"modified":"2015-04-26T16:07:01","modified_gmt":"2015-04-26T21:07:01","slug":"keep-it-simple-and-complex-stupid","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7606","title":{"rendered":"Keep It Simple And Complex, Stupid"},"content":{"rendered":"<h3><a href=\"http:\/\/www.forbes.com\/sites\/stevekeen\/2015\/04\/20\/keep-it-simple-and-complex-stupid\/\" target=\"_blank\">Keep It Simple And Complex,\u00a0Stupid<\/a><\/h3>\n<p>My last post supporting the use of nonlinear models (\u201c<a class=\"exit_trigger_set\" href=\"http:\/\/www.forbes.com\/sites\/stevekeen\/2015\/04\/16\/you-do-need-a-weatherman\/\" target=\"_blank\">You Do Need A Weatherman<\/a>\u201d) generated some thoughtful responses, mainly along the lines of this post by\u00a0<a href=\"https:\/\/www.blogger.com\/profile\/00181838814176635218\" target=\"_blank\">Ari Andricopoulos<\/a>\u00a0entitled \u201c<a href=\"http:\/\/andricopoulos.blogspot.ch\/2015\/04\/a-view-on-economic-model-debate-from.html\" target=\"_blank\">A View on the Economic Model Debate from a Non-economist (but someone who builds models for a living)<\/a>\u201d. The basic argument is that a full nonlinear model of any significant economic process would be too complicated, and that it was better therefore to stick with tractable linear models, while keeping in mind that the real world is nonlinear:<\/p>\n<blockquote><p>I build models with data for a living, and I am acutely aware of the problems with using non-linear models to make any sort of accurate predictions \u2013 even with huge volumes of data to calibrate it with.<\/p>\n<p>It is not that the systems are linear. They are hugely complex. My problem is that they are too complex to model even with non-linear models. My belief is that linear models do have to be used but with a full understanding of the non-linearity of real life. Also, the whole building of macro-models from first principles, based on \u2018rational\u2019 agents, is a complete joke of a way to design a model that is supposed to be used in the real world.<\/p><\/blockquote>\n<p><span class=\"Apple-style-span\">While these points have some validity (especially Ari\u2019s jibe at \u201crational agent\u201d models), this criticism approaches complex systems from the wrong end\u2014the \u201ccomplicated\u201d as opposed to \u201ccomplex\u201d end. A core lesson from complex systems analysis (dating right from its first discovery by Poincare back in 1899, and manifest in the first simulation of a complex system by Lorenz in 1963) is that\u00a0<em>a simple system can demonstrate complex behaviour<\/em>. And a simple complex system\u2014yes, I know that sounds like an oxymoron, but bear with me\u2014can tell you most of what you need to know about a complicated complex system.<\/span><\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Keep It Simple And Complex,\u00a0Stupid My last post supporting the use of nonlinear models (\u201cYou Do Need A Weatherman\u201d) generated some thoughtful responses, mainly along the lines of this post by\u00a0Ari Andricopoulos\u00a0entitled \u201cA View on the Economic Model Debate from a Non-economist (but someone who builds models for a living)\u201d. The basic argument is that [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[153,154,4962,4958,4961,4959,4957,4956,4960],"class_list":["post-7606","post","type-post","status-publish","format-standard","hentry","category-economics","tag-complex-systems","tag-complexity","tag-linear-systems","tag-lorenz","tag-non-linear-systems","tag-poincare","tag-rational-agents","tag-simple-systems","tag-steven-keen"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7606","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7606"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7606\/revisions"}],"predecessor-version":[{"id":7607,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7606\/revisions\/7607"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7606"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7606"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7606"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}