micro and macro

Cosma wrote about the microfoundations of macroeconomics and received several interesting comments [1, 2].

In my judgment the idea that economics is the statistical mechanics of interacting agents has not worked out very well so far. But of course it has some value, if only some entertainment value in the worst case.



I am for various reasons increasingly convinced that the usual tools of statistics are of limited use when dealing with financial systems or the whole economy and recently I came across a book which expresses a similar sentiment.

The Blank Swan: The End of Probability begins with a discussion of 'regime switching', but with the added complication that the number and properties of those regimes change over time. It then turns quickly into a general discussion of probability.

I am not sure yet what to make of it and I don't know if I can recommend the book. I guess most readers would find it rather weird; But perhaps it is the first step in a new direction ...