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Mini Pleb Economist: AAR from the classroom
654 sats \ 6 comments \ @SimpleStacker 2 Apr econ
Yesterday I did an economic modeling exercise with my class. Part of that involves writing down who all the decision makers are and what their objective is. What's their goal? What do they seek to maximize?
Of course, one of the players we identified was the "government", which I clarified by saying "you mean elected officials".
Then when I asked them what these officials are seeking to maximize, the students said "the public good?" Or "what's best for the community?"
To which I rolled my eyes and said, "Really? Do you really believe that?" Then the students laughed and one said, "to get re-elected!"
Thought this was a fun interaction that highlights how little thought people give to politicians incentives, but also how easy it is to make them see it
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47 sats \ 5 replies \ @Undisciplined 2 Apr
I imagine they were just guessing at the "correct" answer, rather than thinking about it. They would be correct, as far as most of our macro models are concerned.
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46 sats \ 4 replies \ @SimpleStacker OP 2 Apr
Hopefully they'll remember all my based logic when they take their macro classes
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30 sats \ 3 replies \ @Undisciplined 2 Apr
Even my macro professors usually chuckled when they introduced that part of the model. I struggle being very harsh towards them, because they also know that what they're doing is pretty silly.
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24 sats \ 2 replies \ @SimpleStacker OP 2 Apr
Yeah they're not dumb, it's just that their professional incentives don't really align with actually doing anything about this weakness
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30 sats \ 1 reply \ @Undisciplined 2 Apr
I get what they're doing and it's not any worse than what most of our professions does.
They take the approved models (which contain assumptions we all know are wrong) and they tweak it a little in the hope the new model has some improved explanatory power.
No one really wants to take big swings or go out on a limb with a whole new assumption set. Getting that kind of stuff through the review process is a huge pain in the ass. It's so much easier to just say "Following on what so-and-so did..."
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23 sats \ 0 replies \ @SimpleStacker OP 2 Apr
Seriously. One trick I learned after many years of experience is to throw the referees some red meat, coz they feel obligated to criticize something. So throw some red meat in there for them to criticize but that doesn't invalidate the main point of the paper
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