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

Tsoulfidis, Lefteris (2022): Effective Rank and Dimensionality Reduction: From Complex Disaggregation Back to a Simple World.

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 the economy’s input-output data are of low effective dimensionality, meaning that there is overfitting of both data and dimensions and that the fundamental behavior of the economy can be tracked down with the use of a low dimensional system.

• Item Type: MPRA Paper
• Language: English
• Keywords: Near-linearity, price trajectories, eigendecomposition, effective rank, Shannon entropy
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B24 - Socialist ; Marxist ; Sraffian; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist ; Marxian ; Sraffian; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C67 - Input-Output Models; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D46 - Value Theory; D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D57 - Input-Output Tables and Analysis; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E11 - Marxian ; Sraffian ; Kaleckian; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation

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