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10 sats \ 3 replies \ @Solomonsatoshi 10h \ on: A Critique of Black Box Economics econ
Of course its not always easy to build economic models which include all real world variables.
One of the biggest variables being government policies and strategies.
Government policy effects upon economic outcomes is a significant factor but hard to build reliable models upon.
For example you can predict that placing tariffs upon Chinese EV imports will reduce Chinese EV sales and increase those of domestic producers but it is more difficult to quantify the subsequent net benefits/costs. It is even harder to know what response the Chinese government might make- imposing higher costs on supply chains providing US EV manufacturers for example.
Ultimately any economic model will have to simplify the real world variables down to those which can be fitted into a model and give some approximation whether it is Austrian, Monetarist, Keynesian, Communist or other ideology behind its thesis.
Models are not always the way to understand economics. It is sometimes better to use deductive logic on these problems.
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Good point.
Can agree 100%.
Stick to logical deductive reasoning rather then placing reliance upon models where the underlying reasoning (if any) is not transparent.
Trouble is there will always be a market for convenient models (dogma) which presume to give convenient solutions and remove the need for constant thought, reflection and debate.
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Yes, the market for such models is either the state or very closely aligned to state banks, bourses and brokerages.
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