Yes, that is essentially correct. When I first studied computer programming way back when we were taught to use the decimal expansion of pi as a random number generator. Needless to say, this is not a truly random series in a fundamental sense. Today in Silicon Valley lava lamps have become popular to use for generating more truly random number sequences. Barkley Rosser On Thu, 13 Aug 1998 09:00:37 -0400 Tom Lehman <uswa12 at lorainccc.edu> wrote:
> Dear Barkley,
>
> Do you recall assertions in the late 1970's that there was no such thing
> as a computer generated random number. Does anyone still hold this
> view?
>
> Sincerely,
> Tom L.
>
> Rosser Jr, John Barkley wrote:
>
> > This is being sent to three lists, although it is an
> > immediate followup to a thread on pkt (longish).
> > Dave Colander asked if institutions can limit the
> > instabilities associated with chaos and complexity
> > (chaoplexity), a la the famous "corridor of stability" idea
> > of Axel Leijonhufvud. I said maybe, but then said that
> > they may also lead to greater instability. I wish to
> > follow up:
> > 1) The corridor of stability has inherent in it the
> > possibility that by widening the corridor a bit, thus
> > allowing more local volatility, one may gain more
> > boundedness or global stability of the system. This has a
> > counterpart in ecological theory in the alleged tradeoff
> > between "stability" and "resilience" enunciated by C.S.
> > Holling. A simple example is the oak tree (stable but not
> > resilient in a hurricane) versus the palm tree (unstable
> > but resilient in a hurricane) or elephant populations
> > (stable but unresilient) versus sheep blowfly populations
> > (potentially chaotic but resilient). There are many chaotic
> > systems that are actually very resilient, if locally
> > unstable, including our brains (when we aren't bonkers).
> > 2) An example of an institution trying to increase
> > stability but reducing resilience might be the the
> > government bank insurers, or in Japan and "non-opaque"
> > banking systems the central authorities more generally. In
> > the US this was posed as the "moral hazard" problem of
> > FSLIC in that when banks or lenders or borrowers or all of
> > them felt safe because of the government agency covering
> > for them they engaged in reckless behavior that eventually
> > brought the system to a much greater degree of crisis,
> > especially as we are now seeing in East Asia where lots of
> > lenders and borrowers counted on their governments to
> > maintain pegs to the US dollar. Similar such complacency
> > is what we see at the late stages of speculative asset
> > bubbles a la the Ponzi analysis of Minsky.
> > 2) Nevertheless the fear of actual financial market
> > chaos is currently playing a role in some major institution
> > changing going on right now, in particular European
> > monetary unification. One of the most prominent advocates
> > for the EMU all along has been Paul de Grauwe of the
> > University of Leuven in Belgium. I gave a talk there in
> > 1990 on chaos theory right after he and Kris Vansanten at
> > CEPR in London had published a paper showing how chaotic
> > dynamics could easily arise in forex markets. This was
> > followed up by a book by de Grauwe, Embrechts, and Wachter
> > in 1993 on Chaotic Dynamics in Foreign Exchange Markets
> > that developed the argument much further and has been much
> > cited. I personally am convinced that de Grauwe sees the
> > EMU as the way to KILL THE CHAOS in the European forex
> > markets.
> > 4) Finally I note that in the kinds of models of
> > financial markets where there is a struggle between
> > "fundamentalists" and "chartists" or something like that
> > (which is what is going on the de Grauwe et al models) much
> > more complex dynamics are possible than mere chaos, e.g.
> > fractal basin boundaries (eeeeek!) and some other pretty
> > hairy stuff. A paper giving the full array of this stuff is
> > William A. Brock and Cars H. Hommes, "A Rational Route to
> > Randomness," _Econometrica_, 1997, vol. 65, pp. 1059-1095.
> > Barkley Rosser
> > Professor of Economics
> > James Madison University
> > Harrisonburg, VA 22807 USA
> >
> > --
> > Rosser Jr, John Barkley
> > rosserjb at jmu.edu
>
>
>
-- Rosser Jr, John Barkley rosserjb at jmu.edu