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> The parts of economics that are valuable are not based on econometrics, but upon reasoning from first principles: Incentives, supply and demand, game theory e
by cycomanic 5y ago
> The parts of economics that are valuable are not based on econometrics, but upon reasoning from first principles: Incentives, supply and demand, game theory etc. under which I would argue all of your examples fall.
So how do you confirm these first principles? I'd argue that those are an even wider door to let your biases flow into the analysis. I mean this type of argument has given us trickle down economics which has significant real world evidence it doesn't work.
- hgomersall 5y agoIt's worse than that, not only are the first principles demonstrably flawed, the towering edifice built on top fails due to some very iffy analysis. It's remarkable how much time and effort goes into attempting to maintain the idea of equilibrium in economics. You can only add so many epicycles before you should perhaps consider your model is wrong.
- imtringued 5y agoEconomists don't believe in their own theories. I see people simply declare the market free when it is clear that it is not or people claim Says Law is infallible when it actually can be used to predict the exact opposite of what it is usually lazily abused for. For example people use says law to argue saving does not create unemployment but says law can also be interpreted as saving is impossible over the long run and therefore unemployment shouldn't happen either.