4 ms·

To be fair to the journalists, those are actually open research questions.

by neffy 8y ago

msla 8y ago
> To be fair to the journalists, those are actually open research questions. There are strong consensuses about some aspects of those problems, however, especially regarding the benefits of using government debt to finance stimulus programs as part of a counter-cyclical action against a recession. Saying it's all unknown is about as intellectually honest as saying that we don't know whether the world is flat or round because we're unsure of its topology at the millimeter scale.
- bgorman 8y ago
  Economics, like all social sciences is nowhere near as sound as the hard sciences. You simply cannot have control groups for many experiments so you are left with case studies, which are often unconvincing. For example, does a true free market really exist anywhere in the world? How about a 100% command economy? How can you honesty determine if the federal reserve helps or hurts the economy?
  - msla 8y ago
    > Economics, like all social sciences is nowhere near as sound as the hard sciences. You simply cannot have control groups for many experiments so you are left with case studies, which are often unconvincing. You can say the same thing about paleontology, but do you seriously doubt the past existence of non-avian dinosaurs? > For example, does a true free market really exist anywhere in the world? How about a 100% command economy? You don't need perfect examples of things to observe what happens when economies closely approach those extremes. > How can you honesty determine if the federal reserve helps or hurts the economy? By observing how horrible the business cycle was prior to its existence.
    - msla 8y ago
      I see disagreement by downvoting is in effect, which discredits the disagreement.
- CryptoPunk 8y ago
  >>There are strong consensuses about some aspects of those problems, however, especially regarding the benefits of using government debt to finance stimulus programs as part of a counter-cyclical action against a recession. There is no consensus that counter-cyclical stimulus is beneficial, outside of those economists already committed to central economic planning of the money supply. Basic economic theory tells us that spending directed by political forces is likely to be less efficient than spending directed by market forces. Counter-cyclical stimulus uses future earnings of the private sector to pay for current government spending, so assuming all other factors remain equal, the price is less market-directed spending. Moreover, counter-cyclical stimulus interferes with the development of the natural corrective processes of a free market, because it means those who saved cash during the credit bubble have less opportunity to buy up assets when the bubble pops. By reducing the capital allocated to this group, you reduce their future influence on the economy, which would have the effect of reducing the magnitude of bubbles, and with it, economic volatility.

To be fair to the journalists, those are actually open research questions.

by neffy 8y ago

To be fair to the journalists, those are actually open research questions.

msla 8y ago

> To be fair to the journalists, those are actually open research questions. There are strong consensuses about some aspects of those problems, however, especially regarding the benefits of using government debt to finance stimulus programs as part of a counter-cyclical action against a recession. Saying it's all unknown is about as intellectually honest as saying that we don't know whether the world is flat or round because we're unsure of its topology at the millimeter scale.

bgorman 8y ago
Economics, like all social sciences is nowhere near as sound as the hard sciences. You simply cannot have control groups for many experiments so you are left with case studies, which are often unconvincing. For example, does a true free market really exist anywhere in the world? How about a 100% command economy? How can you honesty determine if the federal reserve helps or hurts the economy?
- msla 8y ago
  > Economics, like all social sciences is nowhere near as sound as the hard sciences. You simply cannot have control groups for many experiments so you are left with case studies, which are often unconvincing. You can say the same thing about paleontology, but do you seriously doubt the past existence of non-avian dinosaurs? > For example, does a true free market really exist anywhere in the world? How about a 100% command economy? You don't need perfect examples of things to observe what happens when economies closely approach those extremes. > How can you honesty determine if the federal reserve helps or hurts the economy? By observing how horrible the business cycle was prior to its existence.
  - msla 8y ago
    I see disagreement by downvoting is in effect, which discredits the disagreement.
CryptoPunk 8y ago
>>There are strong consensuses about some aspects of those problems, however, especially regarding the benefits of using government debt to finance stimulus programs as part of a counter-cyclical action against a recession. There is no consensus that counter-cyclical stimulus is beneficial, outside of those economists already committed to central economic planning of the money supply. Basic economic theory tells us that spending directed by political forces is likely to be less efficient than spending directed by market forces. Counter-cyclical stimulus uses future earnings of the private sector to pay for current government spending, so assuming all other factors remain equal, the price is less market-directed spending. Moreover, counter-cyclical stimulus interferes with the development of the natural corrective processes of a free market, because it means those who saved cash during the credit bubble have less opportunity to buy up assets when the bubble pops. By reducing the capital allocated to this group, you reduce their future influence on the economy, which would have the effect of reducing the magnitude of bubbles, and with it, economic volatility.