Information Theoretic Competitiveness Composite Indicator at Micro Level

2014 ◽  
Vol 123 (2) ◽  
pp. 349-370
Author(s):  
Rosa Bernardini Papalia ◽  
Pinuccia Calia ◽  
Carlo Filippucci
Keyword(s):  
Composite Indicator ◽  
Information Theoretic ◽  
Micro Level

scholarly journals How Complexity and Uncertainty Grew with Algorithmic Trading

Entropy ◽  
2020 ◽  
Vol 22 (5) ◽  
pp. 499
Author(s):  
Martin Hilbert ◽  
David Darmon
Keyword(s):  
Machine Learning ◽  
Macro Level ◽  
Algorithmic Trading ◽  
Theoretic Analysis ◽  
Learning Paradigm ◽  
Information Theoretic ◽  
Fourth Digit ◽  
Local Uncertainty ◽  
Micro Level ◽  
Bid Ask Spreads

The machine-learning paradigm promises traders to reduce uncertainty through better predictions done by ever more complex algorithms. We ask about detectable results of both uncertainty and complexity at the aggregated market level. We analyzed almost one billion trades of eight currency pairs (2007–2017) and show that increased algorithmic trading is associated with more complex subsequences and more predictable structures in bid-ask spreads. However, algorithmic involvement is also associated with more future uncertainty, which seems contradictory, at first sight. On the micro-level, traders employ algorithms to reduce their local uncertainty by creating more complex algorithmic patterns. This entails more predictable structure and more complexity. On the macro-level, the increased overall complexity implies more combinatorial possibilities, and therefore, more uncertainty about the future. The chain rule of entropy reveals that uncertainty has been reduced when trading on the level of the fourth digit behind the dollar, while new uncertainty started to arise at the fifth digit behind the dollar (aka ‘pip-trading’). In short, our information theoretic analysis helps us to clarify that the seeming contradiction between decreased uncertainty on the micro-level and increased uncertainty on the macro-level is the result of the inherent relationship between complexity and uncertainty.

scholarly journals Micro-Macro Connected Stochastic Dynamic Economic Behavior Systems

Econometrics ◽  
2018 ◽  
Vol 6 (4) ◽  
pp. 46
Author(s):  
George Judge
Keyword(s):  
Stochastic Dynamics ◽  
Economic Behavior ◽  
Stochastic Dynamic ◽  
Information Theoretic ◽  
Interacting Agents ◽  
Income Data ◽  
Micro Level ◽  
Power Divergence ◽  
Statistical Systems ◽  
Behavior Systems

In this paper, we borrow some of the key concepts of nonequilibrium statistical systems, to develop a framework for analyzing a self-organizing-optimizing system of independent interacting agents, with nonlinear dynamics at the macro level that is based on stochastic individual behavior at the micro level. We demonstrate the use of entropy-divergence methods and micro income data to evaluate and understand the hidden aspects of stochastic dynamics that drives macroeconomic behavior systems and discuss how to empirically represent and evaluate their nonequilibrium nature. Empirical applications of the information theoretic family of power divergence measures-entropic functions, interpreted in a probability context with Markov dynamics, are presented.

Is technological change a devourer of jobs?

2017 ◽  
pp. 111-140 ◽  
Author(s):  
R. Kapeliushnikov
Keyword(s):  
Technological Change ◽  
Critical Analysis ◽  
New Technologies ◽  
Employment Growth ◽  
Foreseeable Future ◽  
Employment Effects ◽  
Technological Unemployment ◽  
Micro Level ◽  
Task Sets ◽  
The Impact

The paper provides a critical analysis of the idea of technological unemployment. The overview of the existing literature on the employment effects of technological change shows that on the micro-level there exists strong and positive relationship between innovations and employment growth in firms; on the sectoral level this correlation becomes ambiguous; on the macro-level the impact of new technologies seems to be positive or neutral. This implies that fears of explosive growth of technological unemployment in the foreseeable future are exaggerated. Our analysis further suggests that new technologies affect mostly the structure of employment rather than its level. Additionally we argue that automation and digitalisation would change mostly task sets within particular occupations rather than distribution of workers by occupations.

Beyond GDP: The Quest for a Measure of Social Welfare. Part II

2012 ◽  
pp. 32-51 ◽  
Author(s):  
M. Fleurbaey
Keyword(s):  
Social Welfare ◽  
Social Relations ◽  
Well Being ◽  
Welfare Economics ◽  
Subjective Well Being ◽  
Alternative Approaches ◽  
Micro Level ◽  
Beyond Gdp

The second part of the paper is devoted to the non-monetary indicators of social welfare. Various approaches to the study of subjective well-being and happiness are described. The author shows what problems a researcher would encounter trying to analyze welfare on the micro-level and to take account of the cognitive and affective aspects of the individuals assessment of their well-being, as well as the relevance of social relations. The author also shows to what extent the alternative approaches, particularly the analysis of functionings and capabilities advanced by A. Sen are compatible to the modern welfare economics and what prospects the latter has.

Psychology of the Market and Economic Power (On Psychological Approach of Alan Greenspan to the Analysis of Economic Problems)

2011 ◽  
pp. 99-118
Author(s):  
Yu. Olsevich
Keyword(s):  
Economic Policy ◽  
Institutional Transformation ◽  
The Other ◽  
Economic Power ◽  
Psychological Approach ◽  
Market System ◽  
Economic Problems ◽  
Systemic Crisis ◽  
Micro Level ◽  
The One

The article analyzes the psychological basis of the theory and economic policy of libertarianism, as contained in the book by A. Greenspan "The Age of Turbulence", clarifies the strengths and weaknesses of this doctrine that led to its discredit in 2008. It presents a new understanding of liberalization in 1980-1990s as a process of institutional transformation at the micro and meso levels, implemented by politicians and entrepreneurs with predatory and opportunistic mentality. That process caused, on the one hand, the acceleration of growth, on the other hand - the erosion of informal foundations of a market system. With psychology and ideology of libertarianism, it is impossible to perceive real macro risks generated at the micro level, which lead to a systemic crisis, and to develop measures to prevent it.

Sign in / Sign up

Export Citation Format

Share Document