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Lets take a very particular variable. Every month or so, central/state banks in every country have a meeting to decide the policy rate. They look at some data a

Lets take a very particular variable. Every month or so, central/state banks in every country have a meeting to decide the policy rate. They look at some data and the output of some models, then wave some political magic wand over it and make a decision about which direction to move the rate. Then they make a statement like, "our decision will decrease inflation over the next three quarters by this much." The data they use is usually publicly available, the models used by these must not be very secret. Is it not possible to hook this all up into a nice package, where I can go in and tune some knobs to my liking (there will always be knobs) to get a prediction on the inflation over the next three quarters. Then, I can publicly claim, "Given this data, and this model, and my knob settings, here are my prediction." Then some other economist can come and dispute the data, model and the knob settings. They select a different data source, model and their own knobs. Then three quarters later we check who made the right prediction. Notice, I am not asking for the correct model of reality. Only a playground where people can argue using concrete data, models and knobs.

sdfghswe 3y ago
Ok fine. My strong reaction was really due to the use of the word "simulator". But if you say model - yeah, central banks do that. I'm not really familiar how public their models are. I would bet you that they intentionally don't want people to know "here's the exact model and here's the exact inputs", because they want to keep some discretion for themselves. They want to be able say "I know that this model with these inputs says X, but as a thinking human being I know that the model doesn't account for Y which has been crucial in these past few months, and so instead of X we'll do Z". What you said makes a lot of sense, but it would require collaboration from the decision makers. There's no incentive, I believe, for someone to do this "open source stye", because the moment that their effort pays off, some hedge fund will take it and use it to trade on it.
mathiasgredal 3y ago
The Danish Ministry of Finance has a public model they use to forecast the economic impact of certain policy decisions called MAKRO: https://github.com/DREAM-DK/MAKRO/tree/main https://github.com/DREAM-DK/MAKRO/tree/main

sdfghswe 3y ago

Ok fine. My strong reaction was really due to the use of the word "simulator". But if you say model - yeah, central banks do that. I'm not really familiar how public their models are. I would bet you that they intentionally don't want people to know "here's the exact model and here's the exact inputs", because they want to keep some discretion for themselves. They want to be able say "I know that this model with these inputs says X, but as a thinking human being I know that the model doesn't account for Y which has been crucial in these past few months, and so instead of X we'll do Z". What you said makes a lot of sense, but it would require collaboration from the decision makers. There's no incentive, I believe, for someone to do this "open source stye", because the moment that their effort pays off, some hedge fund will take it and use it to trade on it.

mathiasgredal 3y ago

The Danish Ministry of Finance has a public model they use to forecast the economic impact of certain policy decisions called MAKRO: https://github.com/DREAM-DK/MAKRO/tree/main https://github.com/DREAM-DK/MAKRO/tree/main