Now that real scientists are on their case, econometricians are in trouble. People that really understand math and its application in science are not going to be blinded by the bullshit.
Economist Alan Kirman used this metaphor in a recent history exploring how and why macroeconomics hasn’t made more progress and why it suffers from the “pretense of knowledge syndrome”:Is conventional economics a science or a cult? You decide.
The theory that we have developed is self‐contained and logically consistent but has little to do with the actual functioning of the economy and its markets. The search for empirically refutable propositions has not been a high priority. We have reached an isolated peak far from the other challenging hills that we might profitably try to climb. Sometimes, in moments of weakness, I conjure up the vision of one of those sects that gather on a mountaintop, absolutely sure of their destiny, waiting for the end of the world.Telling stories is useful. But not “just so” stories. We deserve something better.
Physics of Finance
“Just so” stories of modern economics
Mark Buchanan
Buchanan worked in chaos theory and complexity before becoming a science writer and subsequently turning attention to economics and finance.
1 comment:
When he says we pay money to economists to develop these models, he understates their importance. MOST of our political/government officials decisions are given these models as tools to make decisions on natural, financial and labor resource allocation. They aren't simply information produced in reports and fed to unsuspecting students. They shape policy.
Post a Comment