Reconsideration of dimensions and curve fitting practice in view of Georgescu-Roegen's epistemology in economics

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Abstract

This paper is to examine the proper use of dimensions and curve fitting practices elaborating on Georgescu-Roegen's economic methodology in relation to the three main concerns of his epistemological orientation. Section 2 introduces two critical issues in relation to dimensions and curve fitting practices in economics in view of Georgescu-Roegen's economic methodology. Section 3 deals with the logarithmic function (ln z) and shows that z must be a dimensionless pure number, otherwise it is nonsensical. Several unfortunate examples of this analytical error are presented including macroeconomic data analysis conducted by a representative figure in this field. Section 4 deals with the standard Cobb-Douglass function. It is shown that the operational meaning cannot be obtained for capital or labor within the Cobb-Douglas function. Section 4 also deals with economists' "curve fitting fetishism". Section 5 concludes this paper with several epistemological issues in relation to dimensions and curve fitting practices in economics.
Original languageEnglish
Pages (from-to)17-35
JournalRomanian Journal of Economic Forecasting
Volume15
Issue number4
Publication statusPublished - 1 Dec 2012

Keywords

  • Cobb-Douglas function
  • Curve fitting
  • Dimensions
  • Econometrics
  • Logarithmic function
  • Macroeconomics
  • Nicholas Georgescu-Roegen
  • Transcendental production function

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