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Throughout his paper, Krugman argues about the troubles behind mathematical modeling. He often claims that it produces inaccurate results, citing evidence from mapping Africa in the 16th century. I feel that this is a flawed concept, as mathematical modeling has advanced quickly from those days. Also, I do not believe that mathematical modeling is flawed, merely the assumptions made in mathematical models are flawed. The dish-pan model that is represented in the article is also overly simplistic, as it rules out many possible outcomes. Some of these outcomes could even be beneficial to the high development firms from a game theoretic (utility-maximizing) perspective. For example, the high production firms may choose to lower prices to knock out low production firms from the market, then take advantage of the oligopolistic powers they have attained and raise prices significantly. Krugman does not consider this concept, which would likely have dramatically altered his theory. Krugman does bring up an interesting argument, but there are certainly flaws in it. As another student previously noted, he spends paragraphs on the beginning criticizing modeling for being incorrect due to being overly simplistic. However, when he presents his version of the "Big Push" theory, he presents it in an overly simplistic model that overlooks concepts that I mentioned earlier. His ideas about self-reinforcing growth are particularly interesting. Should these comments be deemed correct, many developing countries could put them into action to catapult themselves forward form an economic standpoint, and drastically increase the well-being of their citizens.
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Sep 16, 2015