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Economics is fundamentally based on the fallacy of statistics to say anything meaningful about society. However as someone once noticed, statistically humans ha
by ThomPete 9y ago
Economics is fundamentally based on the fallacy of statistics to say anything meaningful about society. However as someone once noticed, statistically humans have one testicle. It's statistically true but pragmatically useless.
Economics is in reality a study of history sometimes a social science rather than a study of the future. And all economic models are based on historical knowledge.
Economy in itself is pretty harmless but when it's combined with politicians who use it to steer public discourse it's catastrophic.
And so we have economist with no model for factoring in technologys' effect on society advising and informing politicians about public policy.
It is my guess that Economics in the future in many ways will be seen the same way many of us sees astrology. As something which is really good at finding correlation but very bad at exposing any causation.
- tomrod 9y ago> statistically humans have one testicle. It's statistically true but pragmatically useless. A funny quip that highlights more misapplication of statistics than a deep truth of the quantitative realm. Yes, the mean is a statistic. But bi-modality is also something good statisticians (and economists!) pay attention to.
- ThomPete 9y agoOh of course completely agree. The problem though is that it then comes down to the individual rather than the field as a whole.
- soVeryTired 9y agoThe widely-used representative agent paradigm more or less does assume that everyone has one testicle.
- tomrod 9y agoMeh, thus the push for expressing heterogeneity over the past few decades in the literature. Sample papers: [0] [1] [0] http://siteresources.worldbank.org/DEC/Resources/JDSAntmanMcKenzieRevised.pdf http://siteresources.worldbank.org/DEC/Resources/JDSAntmanMc... [1] http://sedici.unlp.edu.ar/bitstream/handle/10915/3512/Documento_completo.pdf?sequence=1 http://sedici.unlp.edu.ar/bitstream/handle/10915/3512/Docume...
- lottin 9y ago> It is my guess that Economics in the future in many ways will be seen the same way many of us sees astrology. As something which is really good at finding correlation but very bad at exposing any causation. On the contrary, econometrics is mostly about telling spurious relations from cause-and-effect, while making predictions is of relatively little interest. This is in contrast with other fields such as AI where making accurate predictions seems to be the main aim and understanding is secondary.
- ThomPete 9y agoUnderstanding the future by understanding the past is the classic mistake of economics. It is this unfounded premise that has led them far far away from anything useful. You could claim the same thing about Astrology. Doesn't change that it's fundamentally not a very useful disciplin to explain anything about the future what so ever and thus as a tool for deciding about the future more or less useless.