Happy birthday to the blog!

I started this blog with its first post six years ago today. At the time, I had derived supply and demand diagrams from an information theoretic approach [1] that I thought might be publishable if it weren't for the institutional roadblocks. For one, I'm not an economist, and while I love the earnestness of "econophysicists" no one listens to them, nor do they (in general) provide a good reason for doing so. The work is sometimes referred to as "heterodox", a) I don't really think it is because that's its own thing (q.v. Carolina Alves) and b) I didn't really know about it at the time — therefore that community isn't/wasn't necessarily a viable alternative to mainstream publication.

I decided to just present the results on this blog — the draft paper I had written was presented in the first few posts here. Eventually those results would be incorporated and expanded on in my first econ pre-print, originally on the arXiv in q-fin.EC (there's a re-post of it at SSRN). That first pre-print contained the model in the forecast above that's been doing well for almost 4 years. Another pre-print followed a couple years later containing its own forecast (of unemployment and JOLTS data) that's also been doing well.

And here we are — six years later. To celebrate, I made an animation of one of the forecasts that I've been tracking the longest — more than half the time this blog has been in existence. The model itself was first written down in February of 2014, less than a year after the blog started — though there general concept was written down in August of 2013.

The interesting thing about this model is that it's a simple idea: the interest rate is the "price of money" and NGDP (~ aggregate demand) is the "demand for money" — with the monetary base being the "supply of money". (It's also a component of the information equilibrium IS/LM model.) It's possible it's not correct (or is only an "effective theory") and what we really have is a dynamic information equilibrium model. But it's still working for now!

Thanks everyone for reading! 

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Footnotes:

[1] And which Thomas Mikaelsen has recently been checking my math on!