EconPapers    
Economics at your fingertips  
 

A Quantum Theory of Money and Value, Part 2: The Uncertainty Principle

David Orrell ()
Additional contact information
David Orrell: Systems Forecasting, Toronto, Canada

Economic Thought, 2017, vol. 6, issue 2, 14 - 26

Abstract: Economic forecasting is famously unreliable. While this problem has traditionally been blamed on theories such as the efficient market hypothesis or even the butterfly effect, an alternative explanation is the role of money – something which is typically downplayed or excluded altogether from economic models. Instead, models tend to treat the economy as a kind of barter system in which money's only role is as an inert medium of exchange. Prices are assumed to almost perfectly reflect the 'intrinsic value' of an asset. This paper argues, however, that money is better seen as an inherently dualistic phenomenon, which merges precise number with the fuzzy concept of value. Prices are not the optimal result of a mechanical, Newtonian process, but are an emergent property of the money system. And just as quantum physics has its uncertainty principle, so the economy is an uncertain process which can only be approximated by mathematical models. Acknowledging the dynamic and paradoxical qualities of money changes our ontological framework for economic modelling, and for making decisions under uncertainty. Applications to areas of risk analysis, forecasting and modelling are discussed, and it is proposed that a greater appreciation of the fundamental causes of uncertainty will help to make the economy a less uncertain place.

Date: 2017
References: Add references at CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://et.worldeconomicsassociation.org/papers/a-q ... certainty-principle/ (text/html)
http://et.worldeconomicsassociation.org/files/2017/10/WEA-ET-6-2-Orrell.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wea:econth:v:6:y:2017:i:2:p:14

Access Statistics for this article

Economic Thought is currently edited by Kyla Rushman

More articles in Economic Thought from World Economics Association Contact information at EDIRC.
Series data maintained by Jake McMurchie ().

 
Page updated 2017-10-21
Handle: RePEc:wea:econth:v:6:y:2017:i:2:p:14