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Economic Science and Entropy
Department of Economics, College of Liberal Arts, Temple University, Philadelphia, USA
- 1 Department of Economics, College of Liberal Arts, Temple University, Philadelphia, USA
Theoretical Economics Letters·Volume 10 (2020)·Pages 1227–1238·Published 27 November 2020·DOI10.4236/tel.2020.106074
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Abstract
Economic theory often does not fully specify the quantitative details of proposed models of economic activity. Instead, only the “direction of influence” of the associated variables is proposed. Such specifications are expressed by the sign patterns of the Jacobian array of the mathematical system specified by the theory. This paper shows that such arrays often only specify the frequency distributions of the sign patterns of arrays that might be estimated from the corresponding data. Shannon’s concept of entropy from information theory can then be used to measure the information provided by the theory.
KeywordsEntropyQualitative AnalysisModel Falsification
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