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Why is predicting a particular economic event the qualification? Sure, predicting the future is nice, but what I want to know is whether it would have happened

by lkbm 10y ago

Why is predicting a particular economic event the qualification? Sure, predicting the future is nice, but what I want to know is whether it would have happened under the policies favoured by economists, whether the effects would have been as severe, whether long-term economic growth and stability would be better or worse, whether human welfare would be improved, whether technological advancement would be greater, whether we'd be happier, healthier, safer... The 2008 crash sucked for a lot of people, but if your economic goal is simply to foresee it or forestall it, you're asking for far too little. It seems a bit like asking why so-called public health experts weren't able to prevent those two cases of Ebola in 2014, while ignoring the 50 000 annual flu+pneumonia deaths and the 600k heart disease deaths--as well as the fact that they stopped ebola infections at two.

dv_dt 10y ago
Because the ability to predict outcomes is a key validator of any scientific field. If civil engineers couldn't predict if a bridge will hold up or fall then we couldn't and shouldn't rely on huge portions of our transpiration network. Similarly with economists, if the field can't forecast the instability of a major sector of our economy then we shouldn't put a tremendous amount of trust on their field for policy. And 2008 wasn't just any economic event, it was a major event which nearly took down the world economy because the financial sector hyperextended and intertwined risks. The economic field had no widely accepted or reliable metric to predict that crash. Public health experts have a very good model for spreads of diseases, models which have been validated many times against real world data, and then therefore can be relied upon to direct resources to help prevent dangerous spreads of disease. Not so with the economic field...

by lkbm 10y ago

dv_dt 10y ago

Because the ability to predict outcomes is a key validator of any scientific field. If civil engineers couldn't predict if a bridge will hold up or fall then we couldn't and shouldn't rely on huge portions of our transpiration network. Similarly with economists, if the field can't forecast the instability of a major sector of our economy then we shouldn't put a tremendous amount of trust on their field for policy. And 2008 wasn't just any economic event, it was a major event which nearly took down the world economy because the financial sector hyperextended and intertwined risks. The economic field had no widely accepted or reliable metric to predict that crash. Public health experts have a very good model for spreads of diseases, models which have been validated many times against real world data, and then therefore can be relied upon to direct resources to help prevent dangerous spreads of disease. Not so with the economic field...