Noah Smith — like so many other mainstream economists — obviously has the unfounded and ridiculous idea that because heterodox people like yours truly, Hyman Minsky, Steve Keen, or Tony Lawson, often criticize the application of mathematics in mainstream economics, we are critical of math per se.
I don’t know how many times I’ve been asked to answer this straw-man objection to heterodox economics– but here we go again.Lars P. Syll’s Blog
Noah Smith — confusing mathematical masturbation with intercourse between research and reality
Lars P. Syll | Professor, Malmo University
So it is not that neoclassical economists have great mathematical tools. It’s that by failing to incorporate the framework of flow of funds, they are showing their incompetence in mathematical reasoning.Math is a tool box filled with various tools fit for different purposes. The art of using tools involves not only knowing how to use each tool properly but also how to choose the right tool for the job.
The Case for Concerted Action
Economics Without Mathematics?
V. Ramanan
Note: Noah Smith is a troll.
14 comments:
Smith is talking about Minsky not Godley....
Minsky: "stability creates instability..."
Smith is 100% spot on...
Smith ignores Godley even though he was the one that got it right, as Jamie Galbraith, Dirk Ehnts and others pointed out. Godley is heterodox in Smith's sense of non-neoclassical and "math-based." Smith doesn't regard accounting and SFC as math.
Anyway, Smith is just trolling the heterodox crowd. He gets off on it.
In that case Tom, don't Feed the troll.
Or, drop the troll from your news feed.
BTW, Michael Hudson got it right, too.
So did William White
William White predicted the approaching financial crisis years before 2007's subprime meltdown. But central bankers preferred to listen to his great rival Alan Greenspan instead, with devastating consequences for the global economy.
Der Spiegel
The Man Nobody Wanted to Hear: Global Banking Economist Warned of Coming Crisis
Beat Balzli and Michaela Schiessl
Many others also
Steve Keens' Debtwatch
“No-one saw this coming?” Balderdash!
Cassander
I saw it coming and called the top in summer 2006. With no model other than in my head. This was a no brainer.
drop the troll from your news feed
Not everything Noah writes is trolling. But he has a thing for heterodox economists.
Here I thought that the replies were interesting and informative.
I searched for the Hatzius report that Ramanan cites but was unable to come up with a link. Anyone?
Here I thought that the replies were interesting and informative.
Okay, you might want to mention that when that is the case. It goes without saying that I will read articles just to see the comments.
Oops. Substitute Bezemer above for Ehnts. Got my Dirks confused.
IF Noah Smith is a new tenure-track econ prof in an orthodox department and/or IF he has accumulated a lot of debt getting there, THEN he may not have much choice in who his friends are, at least for the next half-decade ...
Tom to make predictive statements you have to be studying derivative action of a functional equation, examining trends in summations of ex post data is trial and error.... To say those people "predicted it" is like saying a broken clock is correct 2 x a day....
Those people Iirc are all on the record as saying currently "the other shoe is going to drop" in a "next leg down..."
And it is not happening.... Ask them for a schedule of when that is going to happen...
That is one definition of prediction. It basically says that unless a system is ergodic, then (scientific) predication is impossible. Samuelson understood this and therefore insisted that models in economic assume ergodicity even though the social world that economics is supposedly modeling is non-ergodic. The reality is that using this definition reduces economics to model-buliding with no tie to reality. Hence, the correctness of the "predictions" that such models generate are matter of chance rather than known to be the result of the underlying causality.
Also, unlike the natural sciences, economics cannot be used to generate testable hypotheses owing to the different in type of subject matter. So conventional economists make assumptions, develop theoretical models using these assumptions as foundations, and then observe correlations with outcomes. Successful outcomes are argued to prove the assumptions, which is the logical fallacy of taking the truth of the consequent of a conditional statement to prove the antecedent. Then they either deal with prediction failures ad hoc, revising the model to incorporate the anomaly. This is not science but chicanery.
Tom except they many times don't even come close to looking at data and compare it to their models, which is even worse.
That's why if "data doesn't fit the model, just change reality!", and end up curve fitting.
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