Summary
Much of economic reasoning about noisy growth processes uses ensemble averages in situations where this may not be appropriate. This has to do with the early development of the field in the 17th and 18th centuries. This will be briefly reviewed. The thesis I will present in this seminar is this: in a conceptual framework that considers ensemble averages only, the only answer to low standards of living in parts of a society is overall growth. But firstly, overall growth in well developed economies has proved inefficient as a means for lifting disadvantaged sections of a population out of poverty, and secondly, overall (GDP) growth correlates strongly with CO2 emissions and more generally the consumption of natural resources. When asking how resource consumption can be reduced without sacrificing living standards, it is necessary to change our conceptual framework. Initial ideas, based on an analysis of non-ergodic effects in growth processes, for an improved framework will be presented.
Biography
Dr Ole Peters holds a Ph.D. in theoretical physics from Imperial College London. Prior to joining the Grantham Institute, he worked at the Center for Nonlinear Studies at Los Alamos National Laboratory, the Santa Fe Institute, where he maintains a visiting position, and the University of California Los Angeles. His work focuses on stochastic processes in complex systems, with major applications in fluid dynamics and climatology as well as financial systems.