It is every physicist's dream to find a formula so powerful that it can explain everything (and carry the inventor's name). Such hopes are not as prevalent in Economics, first as we realize that we cannot find such a fundamental equation (we are just not smart enough), second because an economy is so complex that it defies any attempts to reduce it to one equation.
This does not stop James Wayne, who as a physicist is still pursuing his dream. And he claims to have found the Fundamental Equation Of Economics (FEOE), thereby finally proving that Economics is truly part of Physics. What a relief. And what is this equation that can, as the author forcefully argues, explain all observed economic phenomena and solve all economic problems, without exception? What is this formula that shows that equilibrium, the laws of supply and demand, DSGE and SL/ML (whatever that is) models are all deeply flawed? Here it is: The change in time of the joint probability distribution of future valuation of assets and liabilities is a function of its current distribution. We do not know yet what this function is, because it is currently too difficult to figure it out at the atomic level, but we know it exists. Now we can go revolutionize Economics and solve the world's problems.
Long live the Wayne Equation!
This does not stop James Wayne, who as a physicist is still pursuing his dream. And he claims to have found the Fundamental Equation Of Economics (FEOE), thereby finally proving that Economics is truly part of Physics. What a relief. And what is this equation that can, as the author forcefully argues, explain all observed economic phenomena and solve all economic problems, without exception? What is this formula that shows that equilibrium, the laws of supply and demand, DSGE and SL/ML (whatever that is) models are all deeply flawed? Here it is: The change in time of the joint probability distribution of future valuation of assets and liabilities is a function of its current distribution. We do not know yet what this function is, because it is currently too difficult to figure it out at the atomic level, but we know it exists. Now we can go revolutionize Economics and solve the world's problems.
Long live the Wayne Equation!
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