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Steve Keen is starting to do just that! See
Energy, Production and Entropy.

He is working on:

  • a double entry bookkeeping model of economic flows

  • integrated with a physical 'single sector' model of the economy.

This is to show the possibilities. Steve's undergraduate work was in electrical engineering and, in other modeling work, he has created multi-sectoral models of the economy with a private sector, a manufacturing sector and a banking sector, all using differential equations and explicitly including time and money. The results of computer runs of some of those still crude models gave outputs remarkably like real world performance. Exciting stuff.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Nov 29th, 2012 at 12:14:32 PM EST
[ Parent ]
Keen seems to frequently over-reach himself. It's nice that he rates his own ability so highly, and all that blog-adulation must be terribly unhealthly.

He's just not a particularly good analyst.

by LondonAnalytics (Andrew Smith) on Sat Dec 1st, 2012 at 06:59:25 AM EST
[ Parent ]
Yes, he has the self confidence to strike out in new directions and he sometimes makes missteps. His first efforts in multi-sectoral modeling did not fully conform to double entry bookkeeping standards, this was noted and he has since responded. But 'mainstream economics' is not nearly so renowned for the quality of its analysis as it is for the ferocity of its imposition of discipline on any who stray from orthodoxy, especially if they question or challenge fundamental concepts, as Keen has done.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Dec 1st, 2012 at 12:12:01 PM EST
[ Parent ]

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