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Oh, plenty of examples in my pleb economist posts.
Probably one of the biggest culprits in undergraduate econ education is the mistaken ooga booga idea that GDP growth good recession bad.
I mean, yeah, growth is good and recession bad, but it's way more nuanced than that. Not to mention all the measurement problems of GDP.
A great example of this stupid level of economic thinking is this CNBC article which is titled Americans are holding onto devices longer than ever and it’s costing the economy and includes the following gem:
While squeezing as much life out of your device as possible may save money in the short run, especially amid widespread fears about the strength of the consumer and job market, it might cost the economy in the long run, especially when device hoarding occurs at the level of corporations.
It forgets that re-using old devices is providing a flow of services that simply isn't being measured in current GDP numbers. Not realizing this will make you think that re-using old devices is resource negative, but it should be resource positive; we just don't measure things properly.
yes, of course.
...but it's a little bit of a silly strawman -- or at least addressing a very weak version of an argument. I was surprised at Sven Beckert talking negatively about "the economy" as if it's a living being with moral agency that we must care for... but I never see anybody (...but a blockhead!) say that. All thoughtful people I know understand that "the" economy is a shorthand for businesses and consumers aggregated in some way. Broken window fallacy; spending goes somewhere etc; consumption means destruction etc.
So yeah, this is a typical example of a retarded consumption-numbers-only view of "the" economy which no serious thinker, insider or outside of economics holds. That there are retards, and hot-shot history professors, that do isn't exactly surprising... but do you think undergraduate econ education is to blame for this?
So yeah, this is a typical example of a retarded consumption-numbers-only view of "the" economy which no serious thinker, insider or outside of economics holds
Serious thinkers probably don't hold this view, but I do think many people in the business world with a shallow understanding may.
I wouldn't say undergraduate econ is to blame for it, but I'd say that we probably don't do enough to dispel the notion of it. But I'm also not blaming anyone in particular, econ is hard enough to teach to young people who haven't made many economic decisions in their lives, asking them to contemplate tricky measurement and philosophical issues is a lot to throw on top.
Right, yeah I buy that. Good 👍
And one might ask: What is it about the PhD training that elevates their economic thinking?
I truly believe that writing down mathematical models trains this ability. It forces you to think carefully about the forces involved, including crucially the difference between a flow and a stock, and how these things relate. It also forces you to think about measurement when you want to take your model to the data.
This is why I think the Austrians are missing the mark. Yes, mainstream economists are may be overconfident about their mathematical models; but the act of modeling I really do think trains you to think rigorously about what's going on in the economy.
I truly believe that writing down mathematical models trains this ability. It forces you to think carefully about the forces involved, including crucially the difference between a flow and a stock, and how these things relate.
meeeh. Maybe it helps (for some) for tractability and seriously/clearly stating your position. Per Taleb, it's easier to macrobullshit than microbullshit... but I think you can get there quite easily by simple middle-school type verbal reasoning too. (After all, Austrian econ training is all about that; no need for fancy PhDs to get the point)
I think it's possible to arrive at the conclusions with careful verbal reasoning, but what I'd say writing down the model does is that it forces you to confront the precision.
A bit easier to get away with hand-wavy arguments that sound correct but aren't precise about assumptions when using verbal reasoning.
I'd say that mathematical models can train that ability, but I've seen plenty of people successfully avoid actually thinking about the economics underlying their models. Tricky questions are often met with a bunch of handwaving about simplifying assumptions and tractability.
I think it's in the reasoning about identification in econometric models (which Austrians also dislike) or the incentive structure in experimental design (which Austrians also dislike) that PhD students are more forced to improve their economic thinking.
one thing I think Austrians can perhaps appreciate at least is that by writing down the model of behavior, then seriously working through the econometric implications, you truly then highlight the seen and the unseen, which is wholly what makes economics such a challenging subject
she has two purposes with this piece.
That is interesting. Develop? Examples? Saaaay more as Eric Weinstein likes to say when he's excited about something you said