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This comment is totally uninformed and completely wrong. Econometrics is the study of making inferences about economic models from data. Making inferences fro

This comment is totally uninformed and completely wrong. Econometrics is the study of making inferences about economic models from data. Making inferences from data is fundamental to everything economists have done for a long time. Econometricians are essentially applied statisticians. Indeed, I can think of many econometricians I personally know who have joint appointments in university statistics departments. Your claim that they are "hidden in business schools" is completely incorrect. Econometricians are unlikely to have made predictions about NAFTA. You provide no source for your claim that they did. Nor are they likely to have advocated against Glass-Steagall. You provide no evidence for this claim either. If you think econometricians have no training in science or math, you are also totally and completely wrong. (Again: do you think so many econometricians would have joint appointments _in statistics departments_ if that were true?) I would also invite you to visit any seminar in a prominent university economics department in the United States, not just the econometrics seminar. Outside of pure game theory, every seminar series in every department is thoroughly empirical: what is the data, how are the parameters in the model identified, etc. Or go talk to the economists who work at any of the large tech firms! Facebook, Google, and Amazon all have economics groups. Amazon's is to my knowledge the largest. They hire many econometricians every year and have consulting relationships with many of the leading academic econometricians. Would they put so much money into "one of the most discredited branches of academics that exists"? No, they would not. You don't have the slightest idea what you are talking about.

photochemsyn 5y ago
'Econometric models' have so many levers and dials on them that they be tuned to forecast whatever their operator wants them to forecast. Hence they mainly serve as a marketing tool to defend policies that their sponsors desire to get through Congress or the next board meeting or whatever. As far as things like model projections for NAFTA, any relatively simple search turns up dozens of references. Google Scholar isn't all that bad for this, select a custom range 1990-1994 and enter "econometric model 1992 NAFTA projections". There are dozens of results. For example: Appendix B, Macroeconomic Simulations of NAFTA https://www.cbo.gov/sites/default/files/103rd-congress-1993-1994/reports/199307budgetaryanofnafta.pdf https://www.cbo.gov/sites/default/files/103rd-congress-1993-... You can find the same for those seeking to justify the China WTO deal c.2000 but I don't recall reading much about forecasts of creating something called 'the Rust Belt' all across the once-industrial zone covering a third of the US, or the resulting job losses and economic regional malaise. Perhaps something is missing in the models?
- civilized 5y ago
  Econometric models are mentioned twice in that paper, and only to note that they are generally not used and will not be used in the present study, which favors a certain type of general-equilibrium model called the MSG model.
- huitzitziltzin 5y ago
  > 'Econometric models' have so many levers and dials on them that they be tuned to forecast whatever their operator wants them to forecast. I am going to guess you have never written down an economic model, much less presented one at an economics seminar. If your model can be "tuned to forecast whatever", you are going to be annihilated. You will never be able to get away with presenting a model like that. There is no place for it in the field. Quite on the contrary, a premium is placed on parsimonious, well-identified models. > Appendix B, Macroeconomic Simulations of NAFTA This is a useful piece, but to make exactly the opposite of the point you wanted to make. Right there in the executive summary it says "although the overall effect of NAFTA on the US economy would be positive, some firms would contract. Industries in the US that make intensive use of low-wage labor and are now protected by trade barriers are likely to be put at a disadvantage." Or see the entirety of Chapter 5 in the same document, where the authors repeatedly note that there will be industries where employment decreases. Indeed, the worst part for your uninformed initial comment is page 87, wherein the following claim is made: "In sum, despite all of the analyses that have been conducted on various aspects of NAFTA, good information for answering the question 'How many workers would be displaced if NAFTA were implemented?' simply does not exist." A substantial fraction of their Appendix B is devoted to noting weaknesses in the then-current literature about NAFTA. These users of econometrics are well aware of the limitations of the models. Forecasting job losses at that time and today is extremely hard, and the authors of this study acknowledge that. This is literally the opposite of what you initially claimed about econometrics.
  - Kranar 5y ago
    To be fair, the purpose of referencing the Google Scholar citation was not to support the claim that econometricians predicted no decline in manufacturing, it was to refute your claim that: "Econometricians are unlikely to have made predictions about NAFTA." I don't know why you would have made such a claim since it should be fairly obvious that econometricians made numerous predictions of all sorts. I will respect your stance on the issue, you are obviously very informed on the subject and seem passionate about it and that deserves respect, but I'm more sympathetic to OP's point of view that econometricians have not produced much in the way of a consensus on any kind of prediction. Whether we look at the 90s at NAFTA, or the rise of China or other third world countries, or Brexit, or even less global topics and instead pick more local and focused subjects such as the minimum wage, rent control, tax policy... you can basically pick any position on such topics and you won't find anything close to a consensus on it.

photochemsyn 5y ago

'Econometric models' have so many levers and dials on them that they be tuned to forecast whatever their operator wants them to forecast. Hence they mainly serve as a marketing tool to defend policies that their sponsors desire to get through Congress or the next board meeting or whatever. As far as things like model projections for NAFTA, any relatively simple search turns up dozens of references. Google Scholar isn't all that bad for this, select a custom range 1990-1994 and enter "econometric model 1992 NAFTA projections". There are dozens of results. For example: Appendix B, Macroeconomic Simulations of NAFTA https://www.cbo.gov/sites/default/files/103rd-congress-1993-1994/reports/199307budgetaryanofnafta.pdf https://www.cbo.gov/sites/default/files/103rd-congress-1993-... You can find the same for those seeking to justify the China WTO deal c.2000 but I don't recall reading much about forecasts of creating something called 'the Rust Belt' all across the once-industrial zone covering a third of the US, or the resulting job losses and economic regional malaise. Perhaps something is missing in the models?

civilized 5y ago
Econometric models are mentioned twice in that paper, and only to note that they are generally not used and will not be used in the present study, which favors a certain type of general-equilibrium model called the MSG model.
huitzitziltzin 5y ago
> 'Econometric models' have so many levers and dials on them that they be tuned to forecast whatever their operator wants them to forecast. I am going to guess you have never written down an economic model, much less presented one at an economics seminar. If your model can be "tuned to forecast whatever", you are going to be annihilated. You will never be able to get away with presenting a model like that. There is no place for it in the field. Quite on the contrary, a premium is placed on parsimonious, well-identified models. > Appendix B, Macroeconomic Simulations of NAFTA This is a useful piece, but to make exactly the opposite of the point you wanted to make. Right there in the executive summary it says "although the overall effect of NAFTA on the US economy would be positive, some firms would contract. Industries in the US that make intensive use of low-wage labor and are now protected by trade barriers are likely to be put at a disadvantage." Or see the entirety of Chapter 5 in the same document, where the authors repeatedly note that there will be industries where employment decreases. Indeed, the worst part for your uninformed initial comment is page 87, wherein the following claim is made: "In sum, despite all of the analyses that have been conducted on various aspects of NAFTA, good information for answering the question 'How many workers would be displaced if NAFTA were implemented?' simply does not exist." A substantial fraction of their Appendix B is devoted to noting weaknesses in the then-current literature about NAFTA. These users of econometrics are well aware of the limitations of the models. Forecasting job losses at that time and today is extremely hard, and the authors of this study acknowledge that. This is literally the opposite of what you initially claimed about econometrics.
- Kranar 5y ago
  To be fair, the purpose of referencing the Google Scholar citation was not to support the claim that econometricians predicted no decline in manufacturing, it was to refute your claim that: "Econometricians are unlikely to have made predictions about NAFTA." I don't know why you would have made such a claim since it should be fairly obvious that econometricians made numerous predictions of all sorts. I will respect your stance on the issue, you are obviously very informed on the subject and seem passionate about it and that deserves respect, but I'm more sympathetic to OP's point of view that econometricians have not produced much in the way of a consensus on any kind of prediction. Whether we look at the 90s at NAFTA, or the rise of China or other third world countries, or Brexit, or even less global topics and instead pick more local and focused subjects such as the minimum wage, rent control, tax policy... you can basically pick any position on such topics and you won't find anything close to a consensus on it.