4 ms·

> On the other hand, economics goes on from Homo economicus into a mass of mathiness with very poor empirical correlation except perhaps in very very narrow cir

> On the other hand, economics goes on from Homo economicus into a mass of mathiness with very poor empirical correlation except perhaps in very very narrow circumstances. Can you give an example?

dv_dt 8y ago
Can the field of economics give some rationale as to why the dynamics of money has any sort of stable foundation upon which to reason? Physics has at great pains established that indeed god does not play dice with the rules of the universe, but is mass human behavior that consistent? Is there a unified theory of money that predicts economic cycles from the 16th century as well as the 21st?
- zwaps 8y ago
  Depends on what you mean by dynamics of money. Social science usually features two approaches, one micro approach based on individual decisionmaking, and one macro approach trying to find general rules to aggregates (so mass behavior). In terms of micro, yes there are pretty consistent theories as to why and how people use money. Probably the most relevant application thereof are in the microeconomics of banking and in so called microstructure models in finance. In terms of macro, there is of course also a lot of monetary theory as to why people use money in a certain way. What does not yet exist is a unified theory linking micro behavior to all aggregates. Such models typically rely on some sort of representative agent, which is known and recognized to be deeply problematic in scientific terms of aggregation. Other approaches exist, of course, such as agent based models. But there is no "theory of everything" yet. Can economics give rationales? Yes. Peek into any course on the theory of money. But reasoning from micro behavior to aggregates is difficult in social science. We are currently in the process of figuring out better theories of aggregation, but doing so requires using game theory and decision theory in fully interdependent (so for example networked) contexts trough dynamics, so this as of yet also requires a lot of methodological (read: mathematical) machinery that is not yet developed.
- throwawaymath 8y ago
  That's a dodge. The point in my asking that question is to see if you're sufficiently well acquainted with any meaningful literature to actually provide an example substantiating your claim. Inverting the question does not obviate the answer to what I asked you. Moreover, as stated your rebuttal question is underspecified: what do you mean by the "dynamics of money" and "stable foundation"? Can I trivially answer this by talking about the relationship between credit and debts, or are you looking for something more specific? You responded to my (very precise and specific) question with a vague, orthogonal dismissal of the entire field. Why don't you tell me about the "mathiness" in some peer-reviewed economic paper (preferably in a tier 1 journal) that you perceive to only be correlated with real world conditions in "very narrow circumstances"?

> On the other hand, economics goes on from Homo economicus into a mass of mathiness with very poor empirical correlation except perhaps in very very narrow circumstances. Can you give an example?

dv_dt 8y ago

Can the field of economics give some rationale as to why the dynamics of money has any sort of stable foundation upon which to reason? Physics has at great pains established that indeed god does not play dice with the rules of the universe, but is mass human behavior that consistent? Is there a unified theory of money that predicts economic cycles from the 16th century as well as the 21st?

zwaps 8y ago
Depends on what you mean by dynamics of money. Social science usually features two approaches, one micro approach based on individual decisionmaking, and one macro approach trying to find general rules to aggregates (so mass behavior). In terms of micro, yes there are pretty consistent theories as to why and how people use money. Probably the most relevant application thereof are in the microeconomics of banking and in so called microstructure models in finance. In terms of macro, there is of course also a lot of monetary theory as to why people use money in a certain way. What does not yet exist is a unified theory linking micro behavior to all aggregates. Such models typically rely on some sort of representative agent, which is known and recognized to be deeply problematic in scientific terms of aggregation. Other approaches exist, of course, such as agent based models. But there is no "theory of everything" yet. Can economics give rationales? Yes. Peek into any course on the theory of money. But reasoning from micro behavior to aggregates is difficult in social science. We are currently in the process of figuring out better theories of aggregation, but doing so requires using game theory and decision theory in fully interdependent (so for example networked) contexts trough dynamics, so this as of yet also requires a lot of methodological (read: mathematical) machinery that is not yet developed.
throwawaymath 8y ago
That's a dodge. The point in my asking that question is to see if you're sufficiently well acquainted with any meaningful literature to actually provide an example substantiating your claim. Inverting the question does not obviate the answer to what I asked you. Moreover, as stated your rebuttal question is underspecified: what do you mean by the "dynamics of money" and "stable foundation"? Can I trivially answer this by talking about the relationship between credit and debts, or are you looking for something more specific? You responded to my (very precise and specific) question with a vague, orthogonal dismissal of the entire field. Why don't you tell me about the "mathiness" in some peer-reviewed economic paper (preferably in a tier 1 journal) that you perceive to only be correlated with real world conditions in "very narrow circumstances"?