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A Stochastic Complexity Perspective of Induction in Economics and Inference in Dynamics

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K. Vela Velupillai ()
Abstract

Rissanen's fertile and pioneering minimum description length principle (MDL) has been viewed from the point of view of statistical estimation theory, information theory, as stochastic complexity theory -.i.e., a computable approximation to Kolomogorov Complexity - or Solomonoff's recursion theoretic induction principle or as analogous to Kolmogorov's sufficient statistics. All these - and many more - interpretations are valid, interesting and fertile. In this paper I view it from two points of view: those of an algorithmic economist and a dynamical system theorist. >From these points of view I suggest, first, a recasting of Jevons's sceptical vision of induction in the light of MDL; and a complexity interpretation of an undecidable question in dynamics.

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Paper provided by Department of Economics, University of Trento, Italia in its series Department of Economics Working Papers with number 0726.

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Date of creation: 2007
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Handle: RePEc:trn:utwpde:0726

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