An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Well, I for one I'm glad Smith softened his tone.But I call his "it's the title only"-excuse baloney. He is blaming the Gremlins, because he knows they won't talk back.I did read the whole thing, from top to bottom, and the gist of the post was precisely "Economics Without Math Is Trendy, But It Doesn't Add Up".Everybody replied to that, because everybody read that and that's what they understood.Now, perhaps that wasn't what Smith tried to say. That's possible. Then he has a problem making himself understood using written English. Not good for a columnist.PS,I believe Smith is no longer at Stony Brook.
Right, Magpie. Bloomberg lists him as "a Bloomberg View columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion."
I find it really entertaining to watch these people argue about modelling in maths. Because as a systems specialist I *never* model in maths. And the reason for that is pretty clear - I cannot communicate with the widest possible audience if I use something only five people can actually understand.So the tools I use create a visual representation - preferably moving - and often a 'domain specific language' to aid communication. The required maths is hidden away in the tool. So the question you have for 'maths' economists is why are you using obsolete tools that every professional who model systems with people in them never uses - because they are crap for communication. ISTM that economists desperately want to retain the Bible in Latin for the same reason that Catholic Priests of the sixteenth century wanted to retain the Bible in Latin - so that they can remain gatekeepers and interpreters of the magic book. It is time to ignore them and get on with publishing the Bible in English. Everybody should be able to play with an economic simulation so they can understand what they are voting for. And in fact they already do - we just call them multi-player computer games.
If you think about it, what type of relationships economics entail? What is an "economy"? An economy is a bunch of "actors" doing a set of discrete transactions and exchanges between them. You don't need nothing else than addition and subtraction to "model" that. Then you have the time domain, but you don't treat each actor as a variable in an equation and try to add obscure curve fitting coefficients The proper tool for modelling economics are actor based computer models, because you have a register and access to all the empirical data to model them that way. The economists don't want to engage with the data, which is a shame as no other discipline has the availability of data they have. They can, with some research, gather almost all relevant data they need to model an "economy" under different scenarios of independent variables (resources supply, basically), governments and corporations keep track of it.So they prefer to abstract over concrete data and have to use other mathematical tools to simulate flows, instead with dealing with the real deal. in the end is a problem of accountability, I don't think economists want to be accountable, they prefer to be in this academic limbo of excuses so when policies fail they cannot be hold legally accountable, hence "is complicated...", "we don't know" and other excuses.
"The economists don't want to engage with the data, which is a shame as no other discipline has the availability of data they have."This economist does?"The critics of neoclassical economics agree that economics should be about economic reality and should be demonstrably relevant to it. This will strike the non-economist as obvious. However, it is not obvious in mainstream economic thinking: the neoclassical school of thought is based on the deductive approach. This methodology argues that knowledge is brought about by starting with axioms that are not derived from empirical evidence, to which theoretical assumptions are added (again not empirically backed), and on the basis of which tools of logic (mathematics) are utilized to prove theoretical results. There is an alternative approach. This approach examines reality, identifies important facts and patterns, and then attempts to explain them, using logic, in the form of theories. These theories are then tested and modified as needed, in order to be most consistent with the facts of reality. This methodology is called inductivism.20 All the natural sciences and most scientific disciplines use this approach." http://www.palgraveconnect.com/pc/doifinder/view/10.1057/9780230506077
Sherlock Holmes used the deductive approach, yet it never took him 70+ years to solve a case.
No wait... it is claimed that Holmes used abductive reasoning.
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