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Effective Rank and Dimensionality Reduction: From Complex Disaggregation Back to a Simple World

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  • Tsoulfidis, Lefteris

Abstract

In recent years there is a revival of political economy and discussions are about the near linearities of price rate of profit trajectories. In this article, we argue that the economy’s input-output data are of low effective dimensionality, meaning that there is overfitting of both data and dimensions and that the fundamental behavior of the economy can be tracked down with the use of a low dimensional system.

Suggested Citation

  • Tsoulfidis, Lefteris, 2022. "Effective Rank and Dimensionality Reduction: From Complex Disaggregation Back to a Simple World," MPRA Paper 113068, University Library of Munich, Germany, revised 13 May 2022.
    • Handle: RePEc:pra:mprapa:113068
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    References listed on IDEAS

    as
    1. Shaikh, Anwar, 2016. "Capitalism: Competition, Conflict, Crises," OUP Catalogue, Oxford University Press, number 9780199390632.
    2. Bertram Schefold, 2020. "What remains of the Cambridge critique of capital theory, if reswitching and reverse capital deepening are empirically rare and theoretically unlikely?," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 17(2), pages 220-240, September.
    3. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    4. Theodore Mariolis & Lefteris Tsoulfidis, 2018. "Less Is More: Capital Theory And Almost Irregular-Uncontrollable Actual Economies," Contributions to Political Economy, Cambridge Political Economy Society, vol. 37(1), pages 65-88.
    5. Paul A. Samuelson, 1962. "Parable and Realism in Capital Theory: The Surrogate Production Function," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(3), pages 193-206.
    6. Anwar Shaikh, 2022. "Marx, Sraffa and Classical Price Theory [On the significance of recent controversies on capital theory: a Marxian view]," Contributions to Political Economy, Cambridge Political Economy Society, vol. 41(1), pages 58-76.
    7. Lefteris Tsoulfidis & Ioannis Athanasiadis, 2022. "A new method of identifying key industries: a principal component analysis," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 11(1), pages 1-23, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Near-linearity; price trajectories; eigendecomposition; effective rank; Shannon entropy;
    All these keywords.

    JEL classification:

    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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