Saturday, November 24, 2012

Steampunk Economics!

MONIAC, Bill Phillips
(via Timothy Taylor)
Via Paul Krugman, we have Timothy Taylor talking about an hydraulic analog computer, MONIAC, built in or before 1949 by Bill Phillips (of "Phillips curve" renown), intended to model an economy in the presence of user-specified changes to fiscal and monetary variables. Taylor in turn points us to information about an even earlier economic hydraulic analog computer built by Irving Fisher in 1891. (No, I did not transpose a digit: I mean 1891.)

Technophiles and lovers of steampunk will appreciate these devices for their own sake; I, at least, am reminded once again, not for the first time, that there was effective practical mechanical computing of very complex functions of many variables long before there were digital computers of any sort. Economists and similar researchers may learn from the existence of these machines that, as Krugman emphasizes, it is important always to have a model, in the broadest definition of the word, of any system about which one proposes to argue: the lack of a model inevitably leads to certain types of errors that the very process of building a model (physical or mathematical) forces one to deal with a priori. I don't know economics very well, but I can attest to the truth of Prof. Krugman's statement in other contexts: modeling is essential to larger problem-solving.

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