In … Fit the Battle of Econo, Econo, Econo I wrote about the misunderstanding between economists and "econophysicists". It is related to complexity.
Here I link to a pointed blog post of Noah Smith Austrianism, wrong? Inconceivable showing that there is another battle going on - the battle of the Austrian School of Economy.
It's about the use of maths and statistics in economics
As Austrians, we should be interested, just because of the term Austrianism? No, we are not.
We are interested, because it is about the use of mathematics and statistics in economy. And it seems that Austrian economists are averse to use them. Maybe even more, Austrian economics lacks of scientific rigor and rejects scientific methods and the use of data in modeling behavior.
In our understanding any theory needs models (in my understanding of axiomatic mathematics a theorem can only be explained in a model world. Only a model gives operational semantics to a theorem expressed in the language of mathematics - provocatively speaking: there is no such thing as an abstract mathematical program).
And a model is only as good as it backtests. On real data.
Analytic AND data-driven methods
With What Can We Recover from Data Andreas has started a series of posts dealing with parameter identification - the task to transfer a model into a real working space.
I am looking forward to this posts myself.
If humans use models their behavior will change.
IMO, there is a need for a quantitative meso-layer between the micro layer of concrete financial/economic transformations and the macro layer of the development of a complete economy.
Consequently, I am not fighting at the side of the Austrian economists. You cannot predict future, but quants help to build it.