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I wish we had public Monte Carlo simulations for the economy. It's hard watching people argue about things with almost no evidence. The cynic in me is starting
by zackmorris 5y ago
I wish we had public Monte Carlo simulations for the economy.
It's hard watching people argue about things with almost no evidence. The cynic in me is starting to think that that's all politics is. But imagine if people did have evidence, or at least projections within an error bound like the roughly 3% margin of error for polls, and could make decisions based on likely outcomes.
For example, how much would taxes on the US middle class decrease if taxes on the wealthy were raised? How much lower would they be after 5 years, 10 years, if that excess capital was reinvested in, say, an automation moonshot? I've framed a scenario which is obvious to me after running the simulations in my mind over 40 years of watching the national debt increase, but maybe I'm wrong (unlikely).
This site has a "Sample Size Calculator" tab which has a calculator for the number of samples needed to reach a certain confidence level:
https://www.pollfish.com/margin-of-error-calculator/ https://www.pollfish.com/margin-of-error-calculator/
More info:
https://en.wikipedia.org/wiki/Margin_of_error https://en.wikipedia.org/wiki/Margin_of_error
For a population size of 350 million, to get to a 95% confidence level with a 3% margin of error, requires polling 1068 people. Getting to 99% only requires 1849 people.
Now why can't we write something like the program from the article, maybe with some Bayesian inference, maybe some machine learning, with big sample sizes and high confidence levels? This may be the plot of some dystopian novel, but, surely more evidence would help inform a populace that's being spoon-fed ignorance by coopted media?
- benmanns 5y agoThere are, roughly speaking. You can look at option pricing to see market predictions on various outcomes, at least ones that can be boiled down to "what will the price of SPY/TLT/EURUSD be in 2022?" If you have a better simulation, take your output and trade against the market where it's wrong.