3 ms·

These simplistic models of Supply/Demand don't work in the real world. We have price-controls on rent, property tax increases, utilities, healthcare, etc, etc.

These simplistic models of Supply/Demand don't work in the real world. We have price-controls on rent, property tax increases, utilities, healthcare, etc, etc. Would you support removing those?

alphazard 3y ago
I didn't think my comment indicated any policy prescriptions. The law of Supply and Demand is maybe the most rigorously validated theory offered by Economics. It correctly predicts what will happen in each of your examples: - Rent price ceiling, shortage e.g. Apartments in NYC - Property tax increase, decrease in demand for those properties - Utility price ceiling, shortage, e.g. water in CA - Healthcare price ceiling, shortage. e.g. long wait times in countries like Canada Whether or not any of those shortages/surpluses is good or bad is going to depend on your own personal situation. But you aren't even in a position to correctly evaluate that without something at least as predicatively powerful as the law of supply and demand.
- biogene 3y ago
  It doesn't "correctly" predict anything because most of macro-economics is junk science with value only in the limited context of political platforms and giving people some sort of false hope. When the Nobel prize winner of Economics says its all bullshit, I tend to take notice :) https://www.motherjones.com/kevin-drum/2016/09/famous-economist-paul-romer-says-macroeconomics-all-bullshit/ https://www.motherjones.com/kevin-drum/2016/09/famous-econom...
  - sokoloff 3y ago
    Supply and demand effects and the effects of price controls on supply is a topic of microeconomics, not macro.
  - sethammons 3y ago
    > For the record, Romer is calling out one theory and one mathematical construct. The theory is RBC, or Real Business Cycle theory, which suggests that fluctuations in growth are caused by external shocks (oil prices, new inventions, etc.) not by anything central banks do Soooo not the theory of supply and demand.
  - somewhat_drunk 3y ago
    [flagged]
  - mrguyorama 3y ago
    Important to note here: "The Nobel prize of Economics" is not actually a real Nobel prize. It is another third party "prize" setup to emulate the nobel system, so it's much more like the "Nobel peace prize". It's another example of economics pretending to be more rigorous and functional as a science than it actually is.

These simplistic models of Supply/Demand don't work in the real world. We have price-controls on rent, property tax increases, utilities, healthcare, etc, etc. Would you support removing those?

alphazard 3y ago

I didn't think my comment indicated any policy prescriptions. The law of Supply and Demand is maybe the most rigorously validated theory offered by Economics. It correctly predicts what will happen in each of your examples: - Rent price ceiling, shortage e.g. Apartments in NYC - Property tax increase, decrease in demand for those properties - Utility price ceiling, shortage, e.g. water in CA - Healthcare price ceiling, shortage. e.g. long wait times in countries like Canada Whether or not any of those shortages/surpluses is good or bad is going to depend on your own personal situation. But you aren't even in a position to correctly evaluate that without something at least as predicatively powerful as the law of supply and demand.

biogene 3y ago
It doesn't "correctly" predict anything because most of macro-economics is junk science with value only in the limited context of political platforms and giving people some sort of false hope. When the Nobel prize winner of Economics says its all bullshit, I tend to take notice :) https://www.motherjones.com/kevin-drum/2016/09/famous-economist-paul-romer-says-macroeconomics-all-bullshit/ https://www.motherjones.com/kevin-drum/2016/09/famous-econom...
- sokoloff 3y ago
  Supply and demand effects and the effects of price controls on supply is a topic of microeconomics, not macro.
- sethammons 3y ago
  > For the record, Romer is calling out one theory and one mathematical construct. The theory is RBC, or Real Business Cycle theory, which suggests that fluctuations in growth are caused by external shocks (oil prices, new inventions, etc.) not by anything central banks do Soooo not the theory of supply and demand.
- somewhat_drunk 3y ago
  [flagged]
- mrguyorama 3y ago
  Important to note here: "The Nobel prize of Economics" is not actually a real Nobel prize. It is another third party "prize" setup to emulate the nobel system, so it's much more like the "Nobel peace prize". It's another example of economics pretending to be more rigorous and functional as a science than it actually is.