I walked to and from work today and listened to Arnold Kling talking to Econtalk about patterns of sustainable specialisation and trade. Quite apart from how enjoyable it is to be able to walk to work in the sun, it makes my brain tick over nicely.
They were discussing why certain economic models didn’t work, and while they were pontificating about some details it occurred to me that you might be able to think of mathematical models that aproximate the phenomena that economics is concerned with by using fluids.
Straight up mathematical models give one, absolute, answer. It is as if they worked over infinite time, and took an infinitely large sample. Most things take time to settle down; I first came across this idea when I was thinking a lot about search methods and writing genetic algorithms. I was frustrated that the computer wouldn’t spit out the answer to my question, but instead spiraled towards a best guess eventualy.
This morning’s idea was that an economic or physical system could be modeled as a hydraulic system filled with a load of different fluids of different viscosities. So as you try to move from one value to another it takes time to get there, and this lag causes stresses in the system, preventing some things from happening, causing asymmetries in others, and maybe even forcing things to happen that wouldn’t otherwise happen.
Not being especially mathematical I haven’t been able to formulate this properly I’ll leave it to your imagination, but it make it easier for me to think about things.