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Just my opinion, but macroeconomics seems to be good for understanding what's happened, but not so great for predicting what's going to happen. Take the Federal
by thefourthchime 3y ago
Just my opinion, but macroeconomics seems to be good for understanding what's happened, but not so great for predicting what's going to happen. Take the Federal Reserve's policy on interest rates. Lower rates are supposed to get the economy going and increase inflation.
But after the 2008 financial crisis, the Fed cut rates almost to zero, and the big inflation everyone expected just didn't happen. This makes me think about the idea of a "liquidity trap," where people would rather keep their money than invest it, even when interest rates are super low.
This wasn't just a U.S. thing either. The same happened in Japan in the 90s and in Europe after 2008. Even with rock-bottom rates, inflation stayed low.
I know it's not popular wisdom, but maybe we don't know what the fuck is actually going on. And we should just accept that.
- RhodesianHunter 3y agoOr maybe the people who study these things do know what's going on, but politics makes it impossible to do what's needed.
- thefourthchime 3y agoI think you’re implying that people can predict the future and I’m pretty sure you’re wrong about that
- RhodesianHunter 3y agoEducated people in most scientific fields can look at data and predict the likely outcome. Economics is undoubtedly harder, because people are very non-deterministic. However, economists frequently advocate for what we can see would have been a more appropriate path, had we not been hamstrung by ridiculous political tribal warfare led by people who do not understand the underlying economics.