Thursday, November 23, 2006

Peter Phillips, data generating processes, and the big bang...

Peter Phillips delivered the third of his Clarendon Lectures in Oxford last night, and revealed that actually, he does believe life is random. He fitted his random walk to the 600 million year dataset as an expression of his belief on how life is. Needless to say, I disagree with him. The Bible tells us God created this world for a reason, for Him and His purposes. Why do I believe the Bible? Because it has an internally consistent message from the first page to the last, which is God's plan for the universe. He created it, He created man, but man rebelled. But this didn't take God by surprise. He said He would punish man, but promised He would send a Saviour for man. This Saviour was Jesus, predicted by many Old Testament books, notably Isaiah. This Jesus chap can be traced in history without the Bible as a man who attracted many followers, yet died suddenly a criminal's death. The four Gospels in the New Testament explain who Jesus was, and why he fulfilled the predictions in the Old Testament for him, showing he was this promised Saviour. Jesus said "I tell you the truth, whoever hears my word and believes him who sent me has eternal life and will not be condemned; he has crossed over from death to life", amongst other things. Then the rest of the New Testament fleshes out Jesus's death and resurrection and what they mean: basically, Jesus was God, and that by believing in Him, we are saved from God's punishment.

So to put it simply, I think there's a lot of order in this world.

On to data generating processes. Do they exist? Some people suggest they don't. What I mean is, do mechanisms exist that generate what we see in the economy, in the world at large around us? When we see GDP growth is 0.4% this quarter, year-on-year, is there something generating this? I think there is. It's something very hard to discover in its exact form, if not impossible. But it doesn't mean it doesn't exist. And I quite like understanding as much as possible about such things; God's given us a world that is good, and set in place such laws of nature, laws of motion, and other such laws of economics, so to speak.

Finally, the big bang. Scientists in Mexico reckon with a new telescope they can look back to what happened at the beginning of the universe. That's great, cos it's exciting to find out more about this world God's created. Will scientists finding out exactly how the world came into being threaten my belief in God and that He created it? No. Just as a scientist can analyse in great detail a cup of tea, giving me a fantastic chemical breakdown of it, these scientists will give us yet more information on this world around us. But the scientist cannot tell me why I made my cup of tea from analysing the tea alone. He has to ask me why I made it. Just the same with this world. Let's ask God why He made it. As I talked about above, it's all in the Bible.

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At 3:47 pm, Blogger Carlos Santos said...

Hi James,

Long time no see. I have been following your blog with interest but this new Assistant Professor position leaves me with little time to do what I actually thought we should do: I should create a catholic blog to agree or disagree with your claims on econometrics. That should be excitting. In any case, about life being a random walk, it puzzles me that Phillips is playing Max Planck here and you are playing Albert Einstein. Quatum Mechanics is a fundamental piece of modern physics and yet Einstein could not believe the randomness that lurked behind its principles: "God does not play dice" he used to argue while looking for a unified field theory that would join gravitational theory, electromagnetic theory and nuclear physics under one hat. If that is a difficult task for physics do you think it is even imaginable for economics?
As a catholic I believe God has given use the freedom to choose our own paths. Hence, who are we to decide he has a great plan (DGP) to accomodate us all?


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