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Strategy at the edge of chaos
The economist Paul Krugman says that there are three types of economics: up-and-down economics ("stocks were up and unemployment was down today"), airport-bookstore economics (Ten Easy Steps to Avoid Global Depression), and Greek-letter economics. Greek-letter economics is the mathematical variety, practiced in universities and published in academic journals. And it is in serious trouble.
Historically, Greek-letter economics has rewarded mathematical pyrotechnics over fidelity to the real world. The core theories that Greek-letter economics has produced over the last few decades, such as "rational expectations" and "general equilibrium" theory, are mathematically elegant but lacking in empirical validation.
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