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

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  • Tsoulfidis, Lefteris

    (University of Macedonia)

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 economy’s input-output data are of low effective dimensionality, meaning that there is overfitting in that it takes only a few eigenvalues and respected eigenvectors for an adequate representation of the movement of prices, and that some of the fundamental features of the economy may 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," Centro Sraffa Working Papers CSWP57, Centro di Ricerche e Documentazione "Piero Sraffa".
    • Handle: RePEc:ris:sraffa:0057
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    References listed on IDEAS

    as
    1. 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, Oxford University Press, vol. 41(1), pages 58-76.
    2. 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.
    3. Shaikh, Anwar, 2016. "Capitalism: Competition, Conflict, Crises," OUP Catalogue, Oxford University Press, number 9780199390632.
    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. 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.
    6. 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.
    7. 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.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Labor theory of value; Randomness hypothesis; Vertical integration; Effective rank; Eigendecomposition;
    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
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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