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Did you dismiss physics for the same reason? A perfectly elastic ball rolling down a frictionless plane, how absurd!

deleted 7y ago
[deleted]
lkrubner 7y ago
In every class that I took, any such example was always introduced with "Not that a perfectly elastic ball actually exists" whereas with this Baumol effect they are suggesting that this is a real thing in the real world.
wazoox 7y ago
In physics courses, it's pretty clear that perfect balls and frictionless planes aren't actually real. OTOH, I recently had a debate with an economist that nearly insulted me because I doubted that infinite GDP growth was possible in a finite world; you "simply" need to infinitely enhance value of goods and services, which is perfectly possible because it hasn't been proved impossible. Plus it's taught in Econ 101, so how stupid should I be to doubt such a little thing?
- Firadeoclus 7y ago
  There is no known limit to GDP growth because GDP growth doesn't just depend on an increase in material goods, and value judgments can change over time. Thus it is theoretically possible that after a whole series of "this year is better than last year" growth you end up exactly where you started as values shift. Edit: In any case, GDP growth shouldn't be a policy target.
  - dragonwriter 7y ago
    > Thus it is theoretically possible that after a whole series of "this year is better than last year" growth you end up exactly where you started as values shift. Not really, since real GDP growth is measured in value relative to a like-goods price index. > In any case, GDP growth shouldn't be a policy target. It shouldn't be the exclusive policy target, but it makes plenty of sense as one positive factor in the big optimization function. Ceteris paribus, output increases are desirable.
- kodz4 7y ago
  > infinite GDP growth was possible in a finite world A circle is finite but what about Pi? Does it ever end?
anm89 7y ago
I think this is a valid response but ultimately an invalid comparison. The laws of physics are specific and testable. When we abstract them from reality we can be very clear about what the abstractions are and the rules of the hypothetical world we are testing the abstractions in. In economics the situation is very different. We don't even waste time trying to define how things work in reality. All that exists are the abstractions and its never clear in which hypothetical universe those abstractions are being tested because even the poeple writing the theories frequently don't bother with defining them and then change the rules as people challenge their theories.

deleted 7y ago

[deleted]

In every class that I took, any such example was always introduced with "Not that a perfectly elastic ball actually exists" whereas with this Baumol effect they are suggesting that this is a real thing in the real world.

wazoox 7y ago

In physics courses, it's pretty clear that perfect balls and frictionless planes aren't actually real. OTOH, I recently had a debate with an economist that nearly insulted me because I doubted that infinite GDP growth was possible in a finite world; you "simply" need to infinitely enhance value of goods and services, which is perfectly possible because it hasn't been proved impossible. Plus it's taught in Econ 101, so how stupid should I be to doubt such a little thing?

Firadeoclus 7y ago
There is no known limit to GDP growth because GDP growth doesn't just depend on an increase in material goods, and value judgments can change over time. Thus it is theoretically possible that after a whole series of "this year is better than last year" growth you end up exactly where you started as values shift. Edit: In any case, GDP growth shouldn't be a policy target.
- dragonwriter 7y ago
  > Thus it is theoretically possible that after a whole series of "this year is better than last year" growth you end up exactly where you started as values shift. Not really, since real GDP growth is measured in value relative to a like-goods price index. > In any case, GDP growth shouldn't be a policy target. It shouldn't be the exclusive policy target, but it makes plenty of sense as one positive factor in the big optimization function. Ceteris paribus, output increases are desirable.
kodz4 7y ago
> infinite GDP growth was possible in a finite world A circle is finite but what about Pi? Does it ever end?

anm89 7y ago

I think this is a valid response but ultimately an invalid comparison. The laws of physics are specific and testable. When we abstract them from reality we can be very clear about what the abstractions are and the rules of the hypothetical world we are testing the abstractions in. In economics the situation is very different. We don't even waste time trying to define how things work in reality. All that exists are the abstractions and its never clear in which hypothetical universe those abstractions are being tested because even the poeple writing the theories frequently don't bother with defining them and then change the rules as people challenge their theories.