Re:What to Worry About in This Surreal Bull Market
by smaddox on Tuesday November 28, 2017 @01:22PM
(#15799887)
Which is perfectly controllable if your model includes delayed feedback. Unfortunately, the dominant macroeconomic models contain neither delayed feedback nor nonlinearity, and are not capable of simulating recessions without resorting to arbitrary "exogenous shocks".
In contrast, Steve Keen is actively developing dynamic nonlinear models of macroeconomics that is actually capable of simulating endogenous recessions.
If you're interested in learning more about Steve Keen's work, I highly recommend watching his presentation to the OECD: https://www.patreon.com/posts/my-speech-to-new-14735058
Say you've got separate hot and cold faucets and there's a delay between turning the valve and the respective water flowing. By the time you get to just the right mix, the ratio of hot water is still increasing and it'll get messed up again, which leads to increasing the cold water, which makes it too cold, which ... You get the idea.