Azar, Determinismo e Indecidibilidad en la Teoría del Ciclo Económico

Randomness, Determinism and Undecidability in the Business Cycle Theory

Ignacio Escañuela Romana ()

MPRA Paper from University Library of Munich, Germany

Abstract: The scientific literature that studies the economic cycles contains a historical debate between random and deterministic models. On the one hand, models with explanatory variables that follow a stochastic trajectory and produce, through transmission mechanisms, the observed cycles. Its rationale: the so-called Slutsky-Yule effect. In addition, models in which the system state at time t fixes, ceteris paribus condition applying, the state at time t + 1. The cycle would be the product of variables, making it possible to predict and enabling economic policies to combat recessions. The thesis of this paper is as follows. The application of the theorems of Chaitin of undecidability shows that it is not possible to conclude that debate. It is impossible to determine with absolute certainty whether the observed cycles follow a deterministic or stochastic model. To reach this result, I outline the fundamental theories of the business cycle, providing a classification and examples of mathematical models. I review the definition of randomness, and I consider the demonstration of Chaitin about the impossibility of deciding whether a data set is stochastic or not. A consequence, he says, of Gödel incompleteness theorems. I conclude that to consider a series of economic data, aggregated or not, as random or deterministic, depends on the theory. This applies to all cyclical phenomena of any kind. Specific mathematical models have observable consequences. But probabilism and determinism are only heuristic programs that guide the advancement of knowledge.

Keywords: Randomness; business cycle theories; undecidability; heuristic. (search for similar items in EconPapers)
JEL-codes: B40 C00 D50 E32 (search for similar items in EconPapers)
Date: 2016-08-10
New Economics Papers: this item is included in nep-mac
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