13 ms·

Umm, send this to peer review. Here's the link to Góes actual paper(http://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf http://www.imf.org/external/pubs/ft/

by jcbeard 10y ago

Umm, send this to peer review. Here's the link to Góes actual paper(http://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf http://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf) published as an IMF working report which doesn't even have the backing of the IMF/managers/etc. I doubt it'd get published if reviewed. Really, out of the centuries of data they could have pulled in, they chose to use 1980 through 2012? Return on the capital is not ~1%....flawed assumptions, flawed model IMHO. Amazing that WSJ parades it as if it were peer reviewed fact. Then again, I'm not an expert. I only did mathematical modeling for HPC systems, not economies.

nanis 10y ago
> I only did mathematical modeling for HPC systems, not economies. No worries. Economics content in Piketty's arguments is zero.
- alienjr 10y ago
  Exactly: http://www.econlib.org/library/Columns/y2014/Jasaypython.html http://www.econlib.org/library/Columns/y2014/Jasaypython.htm...
- coldtea 10y ago
  And scientific content in most economists is zero. It's 80% ideology + 20% math used to prove their point based on ideological assumptions. Which is also why economics and economists managed to ever make 0 predictions for anything more complicated than the most basic of models, and have failed time and again to predict real world outcomes. And then they get in bed with power, as advisors, ministers, etc -- talk about the worse case of "conflict of interest" compared to any other scientific field. Well, maybe except doctors in the 70s working for the tobacco industry.
  - fwn 10y ago
    "ideological assumptions" or - less biased - "premises".
  - Shivetya 10y ago
    sadly that 80/20 can be applied to other controversial issues as well if not the conflict of interests of being in bed with politicians or corporate interests. outside of hard sciences its difficult for even some in the field to know what is and and what isn't at times, the chance for the layman is near zero. hence when I tend to dismiss anything backed with politician ranting
  - pdkl95 10y ago
    "Understanding economics well impedes an understanding the economy." -- Yanis Varoufakis https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355 https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355
  - berntb 10y ago
    It is a classic conspiracy theory to say that most of a scientific field is a fraud from (political) ideology. (That is, your statement presupposes most people of the field are either idiots, fanatics or crooks.) I'd be interested if you can back that up? (With non ideological sources, of course.) Edit: Considering the numbers, there are going to be some true conspiracy theories... and mass hypnosis from unverifiable things like psychology (Freud, Jung, etc). The burden of proof is still on the one presenting the conspiracy theories. Edit 2: And of course, some sciences are experimental and use the scientific method. Some are largely historical (palaeontology, economics, etc). That doesn't counter my point either.
    - coldtea 10y ago
      >That is, your statement presupposes most people of the field are either idiots, fanatics or crooks. Kind of like there have been hundreds of thousands of Freudian psychoanalysts (considered scientists) in the 20th century until now? Or how people consider (and increasingly clinics embrace) homeopathists as doctors and scientists? With their own educational programs, journals and everything too. In any case there's nothing special about many people working in a field that makes them automatically proper scientists. To begin with, the term "science" is ambiguous. It can refer to empirically or axiomatically verifiable, experimental, scientific-method following fields, which is what is actually "science" (e.g. physics, chemistry, mathematics, biology, etc.) and whatever ad-hoc field of study one can come up with. The first is sometimes called "hard sciences" to differentiate them from the more "lax" and "anything goes" ones. Now, the second type could still be a productive (if informal) field of inquiry and argumentation and insight. I'm all for continental philosophy for example. But it's not scientific in the way engineering or physics is. Not even close. The "Academy of Science" in most countries includes philosophers for example. And they do get Ph.D degrees and everything. They never verify anything, and they can hold totally conflicting views and still be "valid" and well established. Would you consider them "scientists"? If not, are you a conspiracy theorist? It's naive to believe that the way a society names some practices is also revealing about the essence of those practices.
      - berntb 10y ago
  - paganel 10y ago
    > Which is also why economics and economists managed to ever make 0 predictions for anything more complicated than the most basic of models, and have failed time and again to predict real world outcomes. I think present-day economics is at the point where the science of history was at the end of the 19th - the beginning of the 20th century, i.e. most of them still believe that they somehow can predict the future based on past economic events, the same as some historians believed they they could predict our future based on past events from our history. Popper (among others) proved in his "The Poverty of Historicism" (https://en.wikipedia.org/wiki/The_Poverty_of_Historicism https://en.wikipedia.org/wiki/The_Poverty_of_Historicism) why "scientific prediction" is a futile thing. What economics tries to bring new to the table is math (or what they consider as math), apparently that should make us laymen believe that what they're doing is more than crystal-ball guessing.
    - iofj 10y ago
      Currently governments are pumping 180 billion [2] per month into the economic system (ignoring what China is doing, and not yet including fresh BoE stimulus, also not including many smaller asset purchase programs by smaller countries, so it could easily be double or even triple that figure, but let's say 200 billion/month as a wild guess and lower bound, and that's disregarding that some very large parts of the economy, like saudi aramco or the chinese steel industry almost as a whole, are pretty much also government intervention, not "real" private companies), with lots of talk of increasing it. For comparison, company profits for all of the US economy are 410 billion per month [1] (and that's a flawed number that's bigger than it should be). The US economy is about 25% of the world economy. So given that governments are injecting 12.5% of the worldwide economy by printing money ... unless you were willing to predict 8 years ago that global governments were going to provide this utterly ridiculous level of stimulus, control such a huge portion of total worldwide economic activity in addition to government spending ... you couldn't have seen it coming. Economic theory works. Issue is, at the moment economic theory is saying that there should be a global trade collapse. There is, but it's impact is masked, because central banks are taking over serious swaths of the economy (by now close to 50% of government bonds, an extremely large market that rivals the global private sector in size). And of course, it looks a lot like governments fixing the economy has created a feedback loop that requires ever more government control over the economy, and is rapidly increasing (increased from 3% to 12.5% of the global economy in about 6 months, in what very much looks like an exponential increase). And every month, stopping the collapse requires more money, just like economics theory predicts. Of course, that means for the economy that, barring large scale bankruptcies (which are coming anyway of course), the only data that matters is what governments will do to further disrupt markets. Accepted economic theory predicts a boom-bust cycle. Every single bust cycle governments worldwide attempt to stop the bust. Every time they try to take control over the market, and every time they use more extreme measures to do so. Every single time they fail, and every time it happens again, they try again. Economic theory will win out, but everybody has to -once again- lose faith in the government first. That's rapidly coming, but not quite here yet. And this means that every time again, everything looks progressively weirder as the bust approaches, and every time again, government interference leads to people questioning economic theory. Why ? Because the alternative is telling a LOT of people that they're about to lose their jobs, their homes and generally their standard of living. It only tends to be like a 10% worse standard of living for 2-4 years or so (on average), but every time again people refuse to do this. I wouldn't want to be a pensioner in this upcoming cycle though. May God help them, although that was true for past cycles too. Still looking like this one is more serious. Reality is that today is no different. Governments will lose this battle against the bust part of the cycle just like they've lost this very same battle about 30 times since the Industrial revolution. [1] http://www.tradingeconomics.com/united-states/corporate-profits http://www.tradingeconomics.com/united-states/corporate-prof... [2] http://www.zerohedge.com/news/2016-07-26/global-central-banks-are-all-qe-running-record-180-billion-month-and-rising http://www.zerohedge.com/news/2016-07-26/global-central-bank...
  - jsmith0295 10y ago
    This is actually an argument which is pretty core to Austrian economics. They're dismissive of most traditional aggregate models basically because they think they aren't accurate enough to qualify as scientific. Generally Austrians are sort of dismissed as a cult, but IMO they have a pretty compelling explanation of how the Fed's attempts at price level stabilization helped cause the Great Depression. I'm not an economist or someone who has really studied this, though.
- minipci1321 10y ago
  For those who reads french language -- Piketty sometimes publishes articles in Le Monde. I would be really curious to know what people here think about these publications. I am not entirely sure how to interpret them.
argonaut 10y ago
The WSJ didn't present the paper as peer-reviewed fact. It's also not like Piketty's book was peer-reviewed either...
- carlob 10y ago
  Piketty's book was not peer-reviewed, but as it's often the case in all fields you first publish a bunch of peer-reviewed articles on a subject and then you summarize and clarify stuff putting together a book. So the book itself might not be peer-reviewed, but many of the findings within are
- denzil_correa 10y ago
  > It's also not like Piketty's book was peer-reviewed either... Curious, what is exactly a peer-reviewed book? Could you give me some examples of one?
  - DanBC 10y ago
    > Curious, what is exactly a peer-reviewed book? Could you give me some examples of one? Here's an article that describes the problems of the lack of fact-checking in books compared to the fact checking that some US newspapers do. http://www.theatlantic.com/entertainment/archive/2014/09/why-books-still-arent-fact-checked/378789/ http://www.theatlantic.com/entertainment/archive/2014/09/why... > Readers might think nonfiction books are the most reliable media sources there are. But accuracy scandals haven't reformed an industry that faces no big repercussions for errors.
    - denzil_correa 10y ago
      No, I absolutely agree and this is one of the reasons I do not read non-fiction books. I was just wondering what a peer-reviewed book is.
dagaci 10y ago
Why did they select 1980 - 2012. This is narrow. I'm not an economist but I can see an attempt to compare 12 years of selective data against 200 years of data is suspicious.

by jcbeard 10y ago

nanis 10y ago

> I only did mathematical modeling for HPC systems, not economies. No worries. Economics content in Piketty's arguments is zero.

alienjr 10y ago
Exactly: http://www.econlib.org/library/Columns/y2014/Jasaypython.html http://www.econlib.org/library/Columns/y2014/Jasaypython.htm...
coldtea 10y ago
And scientific content in most economists is zero. It's 80% ideology + 20% math used to prove their point based on ideological assumptions. Which is also why economics and economists managed to ever make 0 predictions for anything more complicated than the most basic of models, and have failed time and again to predict real world outcomes. And then they get in bed with power, as advisors, ministers, etc -- talk about the worse case of "conflict of interest" compared to any other scientific field. Well, maybe except doctors in the 70s working for the tobacco industry.
- fwn 10y ago
  "ideological assumptions" or - less biased - "premises".
- Shivetya 10y ago
  sadly that 80/20 can be applied to other controversial issues as well if not the conflict of interests of being in bed with politicians or corporate interests. outside of hard sciences its difficult for even some in the field to know what is and and what isn't at times, the chance for the layman is near zero. hence when I tend to dismiss anything backed with politician ranting
- pdkl95 10y ago
  "Understanding economics well impedes an understanding the economy." -- Yanis Varoufakis https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355 https://www.youtube.com/watch?v=L5AUAIzciLE#t=1355
- berntb 10y ago
  It is a classic conspiracy theory to say that most of a scientific field is a fraud from (political) ideology. (That is, your statement presupposes most people of the field are either idiots, fanatics or crooks.) I'd be interested if you can back that up? (With non ideological sources, of course.) Edit: Considering the numbers, there are going to be some true conspiracy theories... and mass hypnosis from unverifiable things like psychology (Freud, Jung, etc). The burden of proof is still on the one presenting the conspiracy theories. Edit 2: And of course, some sciences are experimental and use the scientific method. Some are largely historical (palaeontology, economics, etc). That doesn't counter my point either.
  - coldtea 10y ago
    >That is, your statement presupposes most people of the field are either idiots, fanatics or crooks. Kind of like there have been hundreds of thousands of Freudian psychoanalysts (considered scientists) in the 20th century until now? Or how people consider (and increasingly clinics embrace) homeopathists as doctors and scientists? With their own educational programs, journals and everything too. In any case there's nothing special about many people working in a field that makes them automatically proper scientists. To begin with, the term "science" is ambiguous. It can refer to empirically or axiomatically verifiable, experimental, scientific-method following fields, which is what is actually "science" (e.g. physics, chemistry, mathematics, biology, etc.) and whatever ad-hoc field of study one can come up with. The first is sometimes called "hard sciences" to differentiate them from the more "lax" and "anything goes" ones. Now, the second type could still be a productive (if informal) field of inquiry and argumentation and insight. I'm all for continental philosophy for example. But it's not scientific in the way engineering or physics is. Not even close. The "Academy of Science" in most countries includes philosophers for example. And they do get Ph.D degrees and everything. They never verify anything, and they can hold totally conflicting views and still be "valid" and well established. Would you consider them "scientists"? If not, are you a conspiracy theorist? It's naive to believe that the way a society names some practices is also revealing about the essence of those practices.
    - berntb 10y ago
- paganel 10y ago
  > Which is also why economics and economists managed to ever make 0 predictions for anything more complicated than the most basic of models, and have failed time and again to predict real world outcomes. I think present-day economics is at the point where the science of history was at the end of the 19th - the beginning of the 20th century, i.e. most of them still believe that they somehow can predict the future based on past economic events, the same as some historians believed they they could predict our future based on past events from our history. Popper (among others) proved in his "The Poverty of Historicism" (https://en.wikipedia.org/wiki/The_Poverty_of_Historicism https://en.wikipedia.org/wiki/The_Poverty_of_Historicism) why "scientific prediction" is a futile thing. What economics tries to bring new to the table is math (or what they consider as math), apparently that should make us laymen believe that what they're doing is more than crystal-ball guessing.
  - iofj 10y ago
    Currently governments are pumping 180 billion [2] per month into the economic system (ignoring what China is doing, and not yet including fresh BoE stimulus, also not including many smaller asset purchase programs by smaller countries, so it could easily be double or even triple that figure, but let's say 200 billion/month as a wild guess and lower bound, and that's disregarding that some very large parts of the economy, like saudi aramco or the chinese steel industry almost as a whole, are pretty much also government intervention, not "real" private companies), with lots of talk of increasing it. For comparison, company profits for all of the US economy are 410 billion per month [1] (and that's a flawed number that's bigger than it should be). The US economy is about 25% of the world economy. So given that governments are injecting 12.5% of the worldwide economy by printing money ... unless you were willing to predict 8 years ago that global governments were going to provide this utterly ridiculous level of stimulus, control such a huge portion of total worldwide economic activity in addition to government spending ... you couldn't have seen it coming. Economic theory works. Issue is, at the moment economic theory is saying that there should be a global trade collapse. There is, but it's impact is masked, because central banks are taking over serious swaths of the economy (by now close to 50% of government bonds, an extremely large market that rivals the global private sector in size). And of course, it looks a lot like governments fixing the economy has created a feedback loop that requires ever more government control over the economy, and is rapidly increasing (increased from 3% to 12.5% of the global economy in about 6 months, in what very much looks like an exponential increase). And every month, stopping the collapse requires more money, just like economics theory predicts. Of course, that means for the economy that, barring large scale bankruptcies (which are coming anyway of course), the only data that matters is what governments will do to further disrupt markets. Accepted economic theory predicts a boom-bust cycle. Every single bust cycle governments worldwide attempt to stop the bust. Every time they try to take control over the market, and every time they use more extreme measures to do so. Every single time they fail, and every time it happens again, they try again. Economic theory will win out, but everybody has to -once again- lose faith in the government first. That's rapidly coming, but not quite here yet. And this means that every time again, everything looks progressively weirder as the bust approaches, and every time again, government interference leads to people questioning economic theory. Why ? Because the alternative is telling a LOT of people that they're about to lose their jobs, their homes and generally their standard of living. It only tends to be like a 10% worse standard of living for 2-4 years or so (on average), but every time again people refuse to do this. I wouldn't want to be a pensioner in this upcoming cycle though. May God help them, although that was true for past cycles too. Still looking like this one is more serious. Reality is that today is no different. Governments will lose this battle against the bust part of the cycle just like they've lost this very same battle about 30 times since the Industrial revolution. [1] http://www.tradingeconomics.com/united-states/corporate-profits http://www.tradingeconomics.com/united-states/corporate-prof... [2] http://www.zerohedge.com/news/2016-07-26/global-central-banks-are-all-qe-running-record-180-billion-month-and-rising http://www.zerohedge.com/news/2016-07-26/global-central-bank...
- jsmith0295 10y ago
  This is actually an argument which is pretty core to Austrian economics. They're dismissive of most traditional aggregate models basically because they think they aren't accurate enough to qualify as scientific. Generally Austrians are sort of dismissed as a cult, but IMO they have a pretty compelling explanation of how the Fed's attempts at price level stabilization helped cause the Great Depression. I'm not an economist or someone who has really studied this, though.
minipci1321 10y ago
For those who reads french language -- Piketty sometimes publishes articles in Le Monde. I would be really curious to know what people here think about these publications. I am not entirely sure how to interpret them.

argonaut 10y ago

The WSJ didn't present the paper as peer-reviewed fact. It's also not like Piketty's book was peer-reviewed either...

carlob 10y ago
Piketty's book was not peer-reviewed, but as it's often the case in all fields you first publish a bunch of peer-reviewed articles on a subject and then you summarize and clarify stuff putting together a book. So the book itself might not be peer-reviewed, but many of the findings within are
denzil_correa 10y ago
> It's also not like Piketty's book was peer-reviewed either... Curious, what is exactly a peer-reviewed book? Could you give me some examples of one?
- DanBC 10y ago
  > Curious, what is exactly a peer-reviewed book? Could you give me some examples of one? Here's an article that describes the problems of the lack of fact-checking in books compared to the fact checking that some US newspapers do. http://www.theatlantic.com/entertainment/archive/2014/09/why-books-still-arent-fact-checked/378789/ http://www.theatlantic.com/entertainment/archive/2014/09/why... > Readers might think nonfiction books are the most reliable media sources there are. But accuracy scandals haven't reformed an industry that faces no big repercussions for errors.
  - denzil_correa 10y ago
    No, I absolutely agree and this is one of the reasons I do not read non-fiction books. I was just wondering what a peer-reviewed book is.

dagaci 10y ago

Why did they select 1980 - 2012. This is narrow. I'm not an economist but I can see an attempt to compare 12 years of selective data against 200 years of data is suspicious.