Steindl on Stochastic Processes
PSL Quarterly Review, Vol. 65 No. 261, pp. 151-166, 2012
16 Pages Posted: 24 Oct 2014
Date Written: June 15, 2012
Abstract
Steindl’s work on stochastic processes aims to describe the economy as in a state of imbalance, due to the fact that its starting conditions are an accident of history, and nobody has a clue what tomorrow will bring. This does not mean that we cannot imagine a balanced distribution – when the various forces of change are constant – as a way of pointing out certain fundamental characteristics. Such a purpose is compatible with the use of stochastic models, because these also entail the study of systematic phenomena. In fact, what we often describe as 'random' is the result of lots and lots of independent forces acting together on a particular phenomenon.
Keywords: Stochastic models, forces of change, Pareto distribution, history matters
JEL Classification: E12, B16, B25, B31
Suggested Citation: Suggested Citation