The Pankian Metaphor wasGoodbye to USENET 3150

I was thinking in the sense of mathematical economy. Getting the mathematical modelling right.

Ah, bitten by the US vs UK english. "Derivative" in UK-english is "Derivate" in US english.

Like in algebra, dervates of polynominals etc.

It is an in-joke among economists that if you are unable to make sense of the formula, take a look at the first order derivate and see if that helps. It it doesn't, look at the next order. If you have been doing this 5 times or more you are almost certainly looking at a cyclical function, so you can do a fourier transform; if that doesn't help you have a "chaotical cyclical function", otherwise you have a "repeating behaviour".

Whenever you hear the mumbo-jumbo about "the rate of change has doubled" or similar, someone has been doing this exercise.

The deeper derivatives you take, the more stable it usually gets, unless there is a cycle in there somewhere.

This is M1, cash holdings. It is around 13-15% of M3, which includes savings. Furthermore, if someone takes out cash because they go on holiday M1 will expand, but that is just noise in terms of the models that make interest rates etc. M1 goes erratically up and down in this fashion, and is pretty useless for forecasts. It also is way too thin, it is only a single-digit percentage of total debt.

Currencies are exceetingly difficult to dismantle. We are rapidly getting to the point of no return for the Euro, where it takes a life of it's own. The dollar did this during WW2.

-- mrr