Friday, April 21, 2017

Economics to physics phrasebook


Cameron Murray tweeted out his old post about economics terminology. Someone commented adding a sociology-economics dictionary. I thought I'd get in on the game with an "economics to physics" dictionary (the $^{*}$ means we're using the economics definition):

$$
\begin{array}
\text{Economics} & Physics \\
\text{commodity} & \text{matter} \\
\text{comparative advantage} & \text{coupling state spaces changes equilibrium}\\
\text{discount factor} & \text{smooth cutoff regulator} \\
\text{DSGE} & \text{arbitrary stochastic difference equation} \\
& \text{with constraints} \\
\text{demand} & \text{unobservable field that interacts with supply}^{*} \\
\text{endogenous} & \text{not an external field} \\
\text{equilibrium} & \text{solution to set of equations} \\
\text{general equilibrium} & \text{solution to all of the equations} \\
\text{partial equilibrium} & \text{solution to a few of the equations} \\
\text{estimate} & \text{fit parameters to data} \\
\text{Euler equation} & \text{equation of motion for constrained Lagrangian} \\
\text{exogenous} & \text{external field} \\
\text{expectations} & \text{toy model}^{*}\;\text{of the future} \\
E_{t} & \text{time translation operator} \\
\text{EMH} & \text{Brownian motion as an effective theory of prices} \\
& \text{(scale unclear)} \\
\text{inflation} & \text{rate of change of the price level}^{*} \\
\text{price level} & \text{arbitrary linear combination of prices} \\
& \text{(varies)} \\
\text{economics} & \text{theoretical economics} \\
\text{growth economics} & \text{theoretical economics} \\
& n \gg 1, t \gg 1 \;\text{quarter} \\
\text{macroeconomics} & \text{theoretical economics} \\
& n \gg 1, t \sim 1 \;\text{quarter}  \\
\text{microeconomics} & \text{theoretical economics} \\
& n \sim 1, t \ll 1 \;\text{quarter}  \\
\text{natural rate of interest} & \text{unobservable field} \\
\text{model} & \text{toy model} \\
\text{toy model} & \text{handwaving} \\
\text{theory} & \text{philosophy} \\
\infty & \text{sometimes inexplicably has units} \\
\text{growth} & \text{exponential growth} \\
\text{money} & \text{toy model}^{*}\;\text{of money} \\
\pi & \text{inflation}^{*} \; \text{, not}\; 3.14159...\\
\text{total factor productivity} & \text{phlogiston} \\
\text{rational expectations} & \text{causality violating toy model}^{*}\;\text{of the future} \\
\text{recession} & \text{toy model}^{*}\;\text{of a recession} \\
\text{supply} & \text{observable field} \\
\text{utility} & \text{unobservable field}
\end{array}
$$

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Also, try to avoid the use of dollar signs as they interfere with my setup of mathjax. I left it set up that way because I think this is funny for an economics blog. You can use € or £ instead.