The Economics of Radical Uncertainty (YouTube Content): Difference between revisions

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 |title=Eric Weinstein: What Math and Physics Can Do for New Economic Thinking
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-|host=Marshall Auerback
+|host=[[Eric Weinstein]]
-|guests=[[Eric Weinstein]]
+|guests=
-|length=00:19:06
+|length=01:31:26
-|releasedate=30 October 2013
+|releasedate=25 April 2014
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-|link1=[https://www.youtube.com/watch?v=XjCAsXUDvno Watch]
+|link1=[https://www.youtube.com/watch?v=XA22-PeraII Watch]
 |link2title=Portal Blog
-|link2=[https://theportal.group/what-math-and-physics-can-do-for-new-economic-thinking/ Read]
+|link2=[https://theportal.group/the-economics-of-radical-uncertainty/ Read]
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-|prev=Systems Architecture, Kabuki Capitalism, and the Economic Manhattan Project (YouTube Content)
+|prev=Towards a Mathematics of New Economic Thinking for Reflexive Markets (Fields Institute Content)
-|next=Towards a Mathematics of New Economic Thinking for Reflexive Markets (Fields Institute Content)
+|next=Economic Thinking In A Fallible World (YouTube Content)
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-'''What Math and Physics Can Do for New Economic Thinking''' was an interview with [[Eric Weinstein]] by Marshall Auerback of The Institute for New Economic Thinking.
+'''The Economics of Radical Uncertainty''' was a presentation by [[Eric Weinstein]] and others hosted by the Institute for New Economic Thinking.
-{{#widget:YouTube|id=XjCAsXUDvno}}
+{{#widget:YouTube|id=XA22-PeraII}}
 == Description ==
-Welcome to our video series called "New Economic Thinking." The series will feature dozens of conversations with leading economists on the most important issues facing economics and the global economy today.
+How do human beings truly react when confronted with conditions of genuine "unknown unknowns"? According to Frank Knight, "Uncertainty must be taken in a sense radically distinct from the familiar notion of risk, from which it has never been properly separated...The essential fact is that 'risk' means in some cases a quantity suscep- tible of measurement, while at other times it is something distinctly not of this character; and there are far-reaching and crucial differences in the bearings of the phenomena depending on which of the two is really present and oper- ating...It will appear that a measurable uncertainty, or 'risk' proper, as we shall use the term, is so far different from an unmeasurable one that it is not in effect an uncertainty at all."
-This episode features Institute for New Economic Thinking grantee Eric Weinstein talking about how math and physics can help foster new economic thinking. As Weinstein points out, while many of the mathematicians and software engineers on Wall Street failed when their abstractions turned ugly in practice, there are a number of physicists and mathematicians who have applied used the empirical disciplines of their profession to help refine many problems that have bedeviled traditional mainstream economics.
+The economics literature from Knight onward is very good at laying out the propensity of markets to greatly overshoot and undershoot the fundamentals. However, economics does not adequately address the implications of "Knightean" uncertainty, because the discipline finds it hard to model this phenomenon. To get a full measure of this, one has to enter into the realm of psychology and neuroscience. That's where the definition lies. Radical uncertainty, like so much else, is too important to be left to the realm of economics alone.
-In this interview, Weinstein explores many creative ways that physics and more sophisticated forms of math can be used to rescue economics from itself and restore its now tarnished reputation.
 == Transcript ==