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Pure economics should be about applying abstractions to help us understand the world. The world is pretty sophisticated, so I'm fine with mathematically sophist

Pure economics should be about applying abstractions to help us understand the world. The world is pretty sophisticated, so I'm fine with mathematically sophisticated abstractions. Even when those abstractions fail intuitively, they can be useful and extended for other subareas of economics or are simply philosophically fascinating. More often than not though, a lot of prominent theory seems impracticable or intractably limited. This is a valid criticism. Noah Smith is slightly misdirecting his complaints though. If we're looking at applied economics or policy, the amount of math is not intimidating to anyone who has taken a couple of years of non-introductory statistics. The most important econometrics papers of the past few years apply basic regressions with only a few additional valid statistical techniques.

runarberg 11y ago
I'd think economics should be about describing systems in terms of cost, and finding how much a certain action will cost or profit the system. There is tons of economy to be found in the natural world, and it is mostly shunned by economists, and left to the naturalists. I don't know of any other science that ignores the natural world like that. And yes I see a problem with that. The probability of being wrong becomes huge. What good is an abstraction if it's wrong?
crdoconnor 11y ago
There's nothing intrinsically wrong with sophisticated mathematical abstractions, but they have to be built upon a foundation of realistic assumptions otherwise they're just intellectual masturbation. There's a disturbing number of economics papers with complex mathematical models built on patently wrong assumptions (perfect competition, a 'natural' rate of unemployment, no barriers to entry in markets and all of that rubbish). I suspect the math is intimidating to policymakers and their advisors even if it isn't to some of us.

runarberg 11y ago

I'd think economics should be about describing systems in terms of cost, and finding how much a certain action will cost or profit the system. There is tons of economy to be found in the natural world, and it is mostly shunned by economists, and left to the naturalists. I don't know of any other science that ignores the natural world like that. And yes I see a problem with that. The probability of being wrong becomes huge. What good is an abstraction if it's wrong?

crdoconnor 11y ago

There's nothing intrinsically wrong with sophisticated mathematical abstractions, but they have to be built upon a foundation of realistic assumptions otherwise they're just intellectual masturbation. There's a disturbing number of economics papers with complex mathematical models built on patently wrong assumptions (perfect competition, a 'natural' rate of unemployment, no barriers to entry in markets and all of that rubbish). I suspect the math is intimidating to policymakers and their advisors even if it isn't to some of us.