Despite its relevance to economic theory and policy Hicks traverse remains little understood. Hicks defines it as the path a steady state follows when “subject to some kind of disturbance.” Theoretically, it pertains to the out-of-equilibrium behavior of an economy. One-Factor Support Vector Machines (O-F SVM) makes it possible to visualize these pathways. When combined with survey data (soft data) as a proxy for beliefs, One-Class SVM captures the traverse through latching points, anomalies, and belief incoherence. All can reshape the manifold (equilibrium). The very local behavior of One-Class SVM means that only nearby observations define the manifold frontier. The novelty lies in identifying observations that deviate from this local behavior, forming equilibria around belief incoherence attractors. O-F SVM locates these attractors between a poverty trap and a full employment attractor where they induce sub-optimal equilibria. Given that frequent changes in the shape of the manifold are a key feature of these equilibria, this paper suggests they represent Hicks temporary equilibria. Empirically, if belief incoherence persists, it signals the need for sustained policy intervention.

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Hicks Traverse Meets O-F SVM: Belief Incoherence Attractors

  • Iulia Igescu

摘要

Despite its relevance to economic theory and policy Hicks traverse remains little understood. Hicks defines it as the path a steady state follows when “subject to some kind of disturbance.” Theoretically, it pertains to the out-of-equilibrium behavior of an economy. One-Factor Support Vector Machines (O-F SVM) makes it possible to visualize these pathways. When combined with survey data (soft data) as a proxy for beliefs, One-Class SVM captures the traverse through latching points, anomalies, and belief incoherence. All can reshape the manifold (equilibrium). The very local behavior of One-Class SVM means that only nearby observations define the manifold frontier. The novelty lies in identifying observations that deviate from this local behavior, forming equilibria around belief incoherence attractors. O-F SVM locates these attractors between a poverty trap and a full employment attractor where they induce sub-optimal equilibria. Given that frequent changes in the shape of the manifold are a key feature of these equilibria, this paper suggests they represent Hicks temporary equilibria. Empirically, if belief incoherence persists, it signals the need for sustained policy intervention.