Reconsideration of Dimensions and Curve Fitting Practice in View of Georgescu-Roegen’s Epistemology in Economics
AbstractThis paper is to examine the proper use of dimensions and curve fitting practices elaborating on Georgescu-Roegen’s economic methodology in relation to the three main concerns of his epistemological orientation. Section 2 introduces two critical issues in relation to dimensions and curve fitting practices in economics in view of Georgescu-Roegen’s economic methodology. Section 3 deals with the logarithmic function (ln z) and shows that z must be a dimensionless pure number, otherwise it is nonsensical. Several unfortunate examples of this analytical error are presented including macroeconomic data analysis conducted by a representative figure in this field. Section 4 deals with the standard Cobb-Douglass function. It is shown that the operational meaning cannot be obtained for capital or labor within the Cobb-Douglas function. Section 4 also deals with economists’ “curve fitting fetishism”. Section 5 concludes this paper with several epistemological issues in relation to dimensions and curve fitting practices in economics.
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Bibliographic InfoArticle provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.
Volume (Year): (2012)
Issue (Month): 4 (December)
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More information through EDIRC
dimensions; logarithmic function; Nicholas Georgescu-Roegen; macroeconomics; Cobb-Douglas function; econometrics; curve fitting; transcendental production function;
Find related papers by JEL classification:
- C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
- C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
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