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0 sats \ 28 replies \ @Rothbardian_fanatic OP 6 Aug \ parent \ on: Jeff Bezos’s Yacht: Driver of Economic Activity econ
Getting published? How is it doing on modeling reality? Or is it just a model constructed from previous data?
It's not really a statistical technique. It helps work out simplified equilibrium conditions. If it helps, it's no worse of an assumption than the standard one-type assumption, which Austrians make all the time.
I think Austrians should take results from this kind of work as clues or hints as to what might be true. It's a lot easier to engage in deductive reasoning if you have a sense of the destination.
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There is also a lot of inductive reasoning going on in Austrian economic thinking! Sometimes setting the destination before doing the reasoning is a lost cause, isn’t it? That reminds me of much of the research going on by The ScienceTM.
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At least for me, it’s a lot easier to work with a model in mathematical notation to derive conclusions.
You know the assumptions in the model, so you can use verbal reasoning to get to the same place but it might not be as obvious without the hint.
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I don’t know, but for some reason I just can’t bring myself to trust the mathematical models when applied to humans. I just have to add, I was once a math major, until the university started screwing with the credit system and requirements when I was nearing the end of the course, so I switched out of that major. Since I stumbled upon Mises and Rothbard, I have been an Austrian. Oh, yes, in my next major I had to take quite a bit of economics courses, too. They did not even get close to mentioning the Austrians, though.
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It's best to think of the models as tools to assist in thinking about bigger picture topics, and not specifically as predictive models of what's actually gonna happen.
My post on game theory and self custody is a good example. Although I didn't use any math, the model I presented can actually be modeled in mathematical terms. It's only meant to illustrate a particular strategic dynamic, and the factors that can variously strengthen or weaken that dynamic. It's not meant to give us a prediction about what will really happen in real life.
It's possible to conduct this reasoning in words, but much harder than if you used the assistance of diagrams, equations, etc.
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I also wonder if it would help to think of the models as being about incentives and equilibrium conditions, rather than descriptions of what individuals will necessarily do.
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Yeah I think that's a pretty fair assessment. They're more a description of what situations are strategically stable based on the incentives at play, rather than a description of what individual people actually do or how they think about it.
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I don’t think there is a human alive that would think in terms of a mathematical model before purchasing something or deciding priorities to satisfy needs and desires. OK, yes, there are certain “market players” that will use mathematical models and algorithms to buy and sell on the controlled stock markets and futures exchanges, I must admit.
Yes, this may be true, but then, it is about something other than economics, isn’t it? Economics is about what people do, not what mathematical systems do. The mathematical models may point out a way to look at things is true.
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We're just talking about the reasoning process behind economic beliefs.
The only difference between deductive verbal reasoning and mathematical logic is the notation. There's nothing inherently more human or economicsy about the preferred approach of Austrians. I think they're approach has its merits, but that's not one of them.
Unfortunately, mathematical models cannot represent human action. There are no proper variables that fit the situation. The reasoning is about something other than human action and catallactics, IMHO.
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