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I absolutely disagree. As an exercise, try translating a representative agent / rational expectations / DSGE model into English and see how ridiculous it sounds

I absolutely disagree. As an exercise, try translating a representative agent / rational expectations / DSGE model into English and see how ridiculous it sounds. Mathematics might force you to be internally consistent, but it also forces you to make bad assumptions. You can prove anything by reasoning from a faulty premise.

QuesnayJr 7y ago
Everyone who stays away from writing down a mathematical model is either confused themselves, or trying to confuse their readers. The advantage of a model with a representative agent, or rational expectations, is that I can see the assumption right there. They made it perfectly clear. They didn't try to fool me with a barrage of words. If I think their explanation is wrong because people are irrational, or because the agent heterogeneity is important, I can take their model and show how it falsifies their results. And one important thing we learned from those models (which I agree do not work) is that we don't get business cycles from irrationality or from agent heterogeneity -- we get them from the failure of markets to clear. Economists were confused about this for like a century, and thanks to mathematical modeling it became clear.
- soVeryTired 7y ago
  > Everyone who stays away from writing down a mathematical model is either confused themselves, or trying to confuse their readers. That seems like a profoundly narrow viewpoint to me. I mean maybe you're right in the sense that there might be an equation that governs the evolution of the universe, but are you really saying mathematical models are the only way to approach research? If so I strongly recommend you do some scientific reading outside of economics and physics. I think most interesting phenomena in the world are too complex to capture in mathematics. Physics is a profound outlier in that regard. > And one important thing we learned from those models (which I agree do not work) is that we don't get business cycles from irrationality or from agent heterogeneity -- we get them from the failure of markets to clear. Economists were confused about this for like a century, and thanks to mathematical modeling it became clear. I really don't think that's clear at all.
  - QuesnayJr 7y ago
    I have done plenty of reading outside of economics and physics, as well as reading in the history of economics. It is clear to me that economics stumbled around in the dark until the mathematical modeling revolution. There are very few interesting phenomena in economics that we can't capture in a model.

QuesnayJr 7y ago

Everyone who stays away from writing down a mathematical model is either confused themselves, or trying to confuse their readers. The advantage of a model with a representative agent, or rational expectations, is that I can see the assumption right there. They made it perfectly clear. They didn't try to fool me with a barrage of words. If I think their explanation is wrong because people are irrational, or because the agent heterogeneity is important, I can take their model and show how it falsifies their results. And one important thing we learned from those models (which I agree do not work) is that we don't get business cycles from irrationality or from agent heterogeneity -- we get them from the failure of markets to clear. Economists were confused about this for like a century, and thanks to mathematical modeling it became clear.

soVeryTired 7y ago
> Everyone who stays away from writing down a mathematical model is either confused themselves, or trying to confuse their readers. That seems like a profoundly narrow viewpoint to me. I mean maybe you're right in the sense that there might be an equation that governs the evolution of the universe, but are you really saying mathematical models are the only way to approach research? If so I strongly recommend you do some scientific reading outside of economics and physics. I think most interesting phenomena in the world are too complex to capture in mathematics. Physics is a profound outlier in that regard. > And one important thing we learned from those models (which I agree do not work) is that we don't get business cycles from irrationality or from agent heterogeneity -- we get them from the failure of markets to clear. Economists were confused about this for like a century, and thanks to mathematical modeling it became clear. I really don't think that's clear at all.
- QuesnayJr 7y ago
  I have done plenty of reading outside of economics and physics, as well as reading in the history of economics. It is clear to me that economics stumbled around in the dark until the mathematical modeling revolution. There are very few interesting phenomena in economics that we can't capture in a model.