Rodger Mitchell — Which is more important to our lives: Meteorology or economics?

I recently commented at Bill Mitchell's in response to a comment asking for a more complete macro approach. Here is what I said:

An ideal macroeconomic explanation would involve a formalized model as a set of equations that accounts for multi-variable inputs (factors) in terms of functions yielding output information that allows prediction of real world events with precision, enabling testing of hypotheses. The economists with whom I am familiar that have a superior understanding of mathematics, having earned degrees in math or physics before entering economics, say to a person that such a model has never been undertaken seriously, and that the math of present econometric models is far too limited for the task.

So such models describe assumed worlds that are not representational enough of the real world to be sufficiently predictive to achieve any degree of precision. The result is that the models not only result in predictions that are disconfirmed by events, even a mammoth events like the GFC, which was thought not be possible or of extremely low probability, but also they are used in policy formulation that fails, resulting in real world damage. like the GFC. MMT economists and others (Wynne Godley) did foresee the potential for crisis building early one using SFC sectoral balance modeling and cautioned about it.. 

So the question for this idealized concept of macro is who is going to write those complex equations and what might they look like? At this stage this is asking for a level of precision that humans have not yet achieved in the social sciences, which have to deal with reflexivity and other factors resulting in uncertainty, quite unlike hard science that deal only with data that is subject to quantification and observation in terms of changes in space-time/mass-energy, where ergodicity prevails at least at the classical level. Not that we can’t do better, but economics is not likely to approach the precision of physics anytime soon.

The social sciences, including economics, are non-ergodic. Solutions in this case are limited to describing underlying structures of a system, or probabilistically based on processing a huge amount of data. MMT chooses to investigate the underlying structure of modern economic system from a particular angle that is selected for the reasons Bill summarizes above.

Roger proposes a path to a more ideal (actually more realistic) solution by tackling complexity in economics the way we approach atmospheric science. That would entail a commitment at least as big, which beyond the scope of any economists or small groups of economists. This would need to be a national project, or, better, a global one conducted on a grand scale and amply funded to do so. This kind of approach probably needs to go hand in hand with advances in artificial intelligence.

Read it at Monetary Sovereignty
Which is more important to our lives: Meteorology or economics?
by Rodger Malcolm Mitchell

OK, engineers, physicists, mathematicians, and computer scientists, have at.