Having a biology background, we’ve always viewed the laws of economics as natural forces, similar to the laws of physics. You can only defy them for so long before reality has to hit.
Along these lines, Marginal Revolution wonders whether economic concepts could even be applied to biology:
Marginal Revolution: Can there be a Keynesian business cycle in the pond? i.e. Could animal spirits drive a natural business cycle? It’s harder for me to see exactly how this would work. We would need “money” or something similar to generate a rush to liquidity and a decline in investment. We could perhaps get a coordination type business cycle (ala Roger Farmer) with herd behaviour. Interestingly, the trend in biology–as I read it at least–has been to think of herd behaviour as optimal for the herd but this is not necessarily the case. We know that slime molds self-organise and aggregate during times of stress could this process be set off with no or little exogenous shock? Could a natural system provide a model for business cycle behaviour? It would be odd if only people had animal spirits. Biology and economics have much to offer one another.
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