Effective Rank and Dimensionality Reduction: from Complex Disaggregation Back to a Simple World

Lefteris Tsoulfidis ()

No CSWP57, Centro Sraffa Working Papers from Centro di Ricerche e Documentazione "Piero Sraffa"

Abstract: In recent years there is a revival of political economy, and discussions are about the near linearities of price rate of profit trajectories. In this article, we argue that economy’s input-output data are of low effective dimensionality, meaning that there is overfitting in that it takes only a few eigenvalues and respected eigenvectors for an adequate representation of the movement of prices, and that some of the fundamental features of the economy may be tracked down with the use of a low dimensional system.

Keywords: Labor theory of value; Randomness hypothesis; Vertical integration; Effective rank; Eigendecomposition (search for similar items in EconPapers)
JEL-codes: B24 B51 C67 D46 D57 E11 E32 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2022-07-27
New Economics Papers: this item is included in nep-hme
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Working Paper: Effective Rank and Dimensionality Reduction: From Complex Disaggregation Back to a Simple World (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:sraffa:0057

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