pull down to refresh
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
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.