A Constructive Approach to Economic Fluctuations

John J. McCall
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John J. McCall: University Of California

Chapter 4 in Business Cycles, 1991, pp 64-104 from Palgrave Macmillan

Abstract: Abstract A major goal of this paper is to introduce a constructive approach to the study of economic phenomena. The highlights of this approach are its connections with the recent advances in neuroscience and the earlier research of Turing, McCulloch, Godel and Church.3 We claim that the spectacular innovations in computer-neuroscience and bio- logical-neuroscience clarify the limitations of modern economics flowing from both its static foundations and its previous neglect of the interdisciplinary foundations of utility and production theory. It is precisely these two areas of neuroscience which contain the building blocks required for constructing dynamic economic processes of tastes and production. The recent neuroscientific innovations are responsible for this potential construction. Furthermore, an interdisciplinary network among economics and the disciplines comprising artificial intelligence (AI) could enhance the AI disciplines as much as it vitalises economics. We maintain that these gains from trade can be realised only if the static and fragile von Neumann-Morgenstern edifice is replaced by flexible foundations less vulnerable to paradox and more tolerant to the faults and errors intrinsic in human decision-making.

Keywords: Markov Process; Jump Process; Local Martingale; Contractual Relation; Business Cycle Theory (search for similar items in EconPapers)
Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-11570-9_4

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DOI: 10.1007/978-1-349-11570-9_4

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