HN is the brightest and most productive group of people I have access to currently, every day I am reminded of just how much I have to learn but also how far I have come.
Where better than here to ask this question and get quality responses from people who see the obvious value of math and science?
Many of the insights of economics seem to be
qualitative, with many fewer reliable quantitative laws.
However a series of power laws in economics do count as
true and nontrivial quantitative laws—and they are not
only established empirically, but also understood
theoretically.
I will start by providing several illustrations of
empirical power laws having to do with patterns involving
cities, firms, and the stock market. I summarize some of
the theoretical explanations that have been proposed.
I suggest that power laws help us explain many economic
phenomena, including aggregate economic fluctuations.
I hope to clarify why power laws are so special, and to
demonstrate their utility.
In conclusion, I list some power-law-related economic
enigmas that demand further exploration.