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I never learn anything in these threads. It seems like everyone is just talking past each other with their pet theories and no particular way to tell which if

by wffurr 5y ago

I never learn anything in these threads. It seems like everyone is just talking past each other with their pet theories and no particular way to tell which if any are correct or useful.

akudha 5y ago
Economics is a weird subject, even economists get predictions wrong all the time. It is easier to talk about logical subjects like Math or programming, vs something like social issues or economics. I don't know how to have a useful conversation about such topics, I understand your frustration. I suppose everyone has good intentions and is trying to help at the same time by sharing their theories - which could be bad or good, but definitely hard to digest, as a reader
- mbesto 5y ago
  > Economics is a weird subject, even economists get predictions wrong all the time. It's because economics is seen as a science but ignores (not completely) human behavior. You can't test economic theories with the scientific method because there is simply no way to create a market vacuum to test. This is why behavioral economics is so interesting IMO. It's not definitive but it at least it provides explanations.
  - xyzzyz 5y ago
    > It's because economics is seen as a science but ignores (not completely) human behavior. That does not describe what economics has looked like for a few decades already. These days, it’s all about human behavior. Just look at the sample of newest papers collected at NBER: https://www.nber.org/papers?page=1&perPage=50&sortBy=public_date#listing-77041 https://www.nber.org/papers?page=1&perPage=50&sortBy=public_... If you look at these, it should be clear that most of published economics these days is basically social science done using quantitative methods. The homo economicus has always been a straw man, but these days it is laughably so.
  - dragonwriter 5y ago
    > You can't test economic theories with the scientific method because there is simply no way to create a market vacuum to test. The scientific method doesn't require laboratory controls; statistically controlled experiments are just as consistent with the scientific method. Now, there are branches of economics which are, more of less overtly, not empirical science but essentially theology, the Austrian school being the most well-known, overt example, and they and their practitioners tend not to be distinguished from those of empirical economics when covered by the mainstream media...
- B-Con 5y ago
  I think of economics as having the classic two sides of theory and practice, but with the quirk that the practice is grossly inefficient because it's a dynamic feedback system based on itself. Engineering takes theoretical principles and pits them into practice. Here's what the free body diagram of a structure might be, but how do you ensure it stays up with abnormal conditions and a client who's going the extra mile to cut costs? Imagine if in engineering, constants changed the more precisely they were measured. pi is different in the USA because China measured it more precisely yesterday. Or if weather patterns changed to exploit the weaknesses of a building to maximize damage. I don't think econ is theoretically irrational, it's just that the application in the public eye is seldom isolated to simple, static systems. When applied to simple systems, I think econ is quite reasonable and makes accurate predictions.
Geee 5y ago
What do you want to learn? Modern economics is mostly a guessing game of what actions governments and central banks implement. Will they print money and how much, will they bail out the banks or let them fall, will they lower or raise the interest rates, is there more stimulus coming, what kind of subsidies and social policies they implement etc. Some economists think that it's good that they have so much power and other economists think that they shouldn't intervene at all and let free market solve everything. It's all mixed with politics, and generally policies are implemented to keep people short term happy, but long term not so happy.
- wffurr 5y ago
  ...and what actual effect any of those actions has! That's the part that's mysterious to me and would be particularly interesting to learn. And more to the point, what can or should I do on an individual level? The OP was about home price to income ratio, and just like in one of the threads, I basically shopped based on monthly payment, not total price. I don't have any anchoring on the value of a particular structure or lot. Should I have made different choices?
  - Geee 5y ago
    I don't know. These policies either increase or decrease economic activity. If economy is accelerated too much it tends to create bubbles and then a big crash. Most people think that we're in a huge bubble right now. No one knows if it will pop or if they will just keep propping it up. This video explains the basic mechanisms pretty well: https://www.youtube.com/watch?v=PHe0bXAIuk0 https://www.youtube.com/watch?v=PHe0bXAIuk0
01100011 5y ago
Economics isn't a solved problem. People fill in the gaps with whatever fits with their preexisting ideology. I also tend to think we software "engineers"(haha) confuse our high salaries and prowess in one domain with a general level of intelligence that lets us outsmart experts in other fields. Really though, this is a very difficult problem, and it very likely won't be solved on an anonymous discussion forum tailored to techno-news.
dunk010 5y ago
THIS.

by wffurr 5y ago

I never learn anything in these threads. It seems like everyone is just talking past each other with their pet theories and no particular way to tell which if any are correct or useful.

akudha 5y ago

Economics is a weird subject, even economists get predictions wrong all the time. It is easier to talk about logical subjects like Math or programming, vs something like social issues or economics. I don't know how to have a useful conversation about such topics, I understand your frustration. I suppose everyone has good intentions and is trying to help at the same time by sharing their theories - which could be bad or good, but definitely hard to digest, as a reader

mbesto 5y ago
> Economics is a weird subject, even economists get predictions wrong all the time. It's because economics is seen as a science but ignores (not completely) human behavior. You can't test economic theories with the scientific method because there is simply no way to create a market vacuum to test. This is why behavioral economics is so interesting IMO. It's not definitive but it at least it provides explanations.
- xyzzyz 5y ago
  > It's because economics is seen as a science but ignores (not completely) human behavior. That does not describe what economics has looked like for a few decades already. These days, it’s all about human behavior. Just look at the sample of newest papers collected at NBER: https://www.nber.org/papers?page=1&perPage=50&sortBy=public_date#listing-77041 https://www.nber.org/papers?page=1&perPage=50&sortBy=public_... If you look at these, it should be clear that most of published economics these days is basically social science done using quantitative methods. The homo economicus has always been a straw man, but these days it is laughably so.
- dragonwriter 5y ago
  > You can't test economic theories with the scientific method because there is simply no way to create a market vacuum to test. The scientific method doesn't require laboratory controls; statistically controlled experiments are just as consistent with the scientific method. Now, there are branches of economics which are, more of less overtly, not empirical science but essentially theology, the Austrian school being the most well-known, overt example, and they and their practitioners tend not to be distinguished from those of empirical economics when covered by the mainstream media...
B-Con 5y ago
I think of economics as having the classic two sides of theory and practice, but with the quirk that the practice is grossly inefficient because it's a dynamic feedback system based on itself. Engineering takes theoretical principles and pits them into practice. Here's what the free body diagram of a structure might be, but how do you ensure it stays up with abnormal conditions and a client who's going the extra mile to cut costs? Imagine if in engineering, constants changed the more precisely they were measured. pi is different in the USA because China measured it more precisely yesterday. Or if weather patterns changed to exploit the weaknesses of a building to maximize damage. I don't think econ is theoretically irrational, it's just that the application in the public eye is seldom isolated to simple, static systems. When applied to simple systems, I think econ is quite reasonable and makes accurate predictions.

Geee 5y ago

What do you want to learn? Modern economics is mostly a guessing game of what actions governments and central banks implement. Will they print money and how much, will they bail out the banks or let them fall, will they lower or raise the interest rates, is there more stimulus coming, what kind of subsidies and social policies they implement etc. Some economists think that it's good that they have so much power and other economists think that they shouldn't intervene at all and let free market solve everything. It's all mixed with politics, and generally policies are implemented to keep people short term happy, but long term not so happy.

wffurr 5y ago
...and what actual effect any of those actions has! That's the part that's mysterious to me and would be particularly interesting to learn. And more to the point, what can or should I do on an individual level? The OP was about home price to income ratio, and just like in one of the threads, I basically shopped based on monthly payment, not total price. I don't have any anchoring on the value of a particular structure or lot. Should I have made different choices?
- Geee 5y ago
  I don't know. These policies either increase or decrease economic activity. If economy is accelerated too much it tends to create bubbles and then a big crash. Most people think that we're in a huge bubble right now. No one knows if it will pop or if they will just keep propping it up. This video explains the basic mechanisms pretty well: https://www.youtube.com/watch?v=PHe0bXAIuk0 https://www.youtube.com/watch?v=PHe0bXAIuk0

01100011 5y ago

Economics isn't a solved problem. People fill in the gaps with whatever fits with their preexisting ideology. I also tend to think we software "engineers"(haha) confuse our high salaries and prowess in one domain with a general level of intelligence that lets us outsmart experts in other fields. Really though, this is a very difficult problem, and it very likely won't be solved on an anonymous discussion forum tailored to techno-news.

dunk010 5y ago

THIS.