Luciano Pietronero Comments Page


Dear Friends,

Yesterday's discussion after my talk was gently monopolized by Ricardo H., so I did not have the opportunity to express my view and I try to do it with this mail.,

Ricardo claims that their reflection algorithm seems to have a relation with economic growth but for reasons he cannot explain. In fact this algorithm has no internal coherence with respect to the diversification and capability arguments. Stimulated by this puzzle yesterday we have decided to go inside the Black Box of Ricardo and study in detail the dynamics (vector field) corresponding to the reflection algorithm. The result is shown on the right side of Fig.1, while the left side refers to our algorithm (Fitness). It seems evident that the reflection method is not able to identify any economic pattern of evolution while the Fitness algorithm clearly can.

Concerning regressions the first comment is that they have no meaning for an heterogeneous dynamics like that of Fig. 1. For these and other reasons extreme caution is required to consider them as a unique validation criterion. In fact, without the grounding of a consistent theory, it is easy to obtain "statistically relevant" results without any economic meaning. As an example please check in Fig. 2 the interesting economic predictive power of meteorites and ufo activity.

The fact that our new algorithm is logically consistent with diversification and capabilities has been defined by Ricardo as Hedonic. On this we agree because its use gives indeed pleasure.

For further hedonic considerations see: link1. [the figures in the link below]

Best to all,

Luciano

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Luciano Pietronero

Istituto dei Sistemi Complessi, CNR, Roma

Dipartimento di Fisica, Universita' di Roma Sapienza,

Piazzale A. Moro 2, 00185 - Roma, Italy

E-mail: luciano.pietronero@roma1.infn.it

WEB page: http://pil.phys.uniroma1.it

tel: +39-06-49913488

FAX: +39-06-4463158

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Figures 1&2