4 ms·

And just like the foundation knowledge of priests is made up, economist theories have turned out to be non-reproducible many times...

yawpitch 3y ago
I don’t think even supply and demand is reliably reproducible in real world conditions, at least not in the way vinegar + baking soda is reliable.
- lotsofpulp 3y ago
  People expect supply and demand to show its effects immediately, whereas it takes years in some markets due to things like sticky prices in things like wages or overwhelming demand relative to supply and hence underestimating the amount of additional supply needed.
  - sumtechguy 3y ago
    That is in next years budget
  - flakeoil 3y ago
    But why simplify it into a simple supply and demand curve when at the end it means nothing because you did not include all the other important factors?
    - lotsofpulp 3y ago
      The root causes are still supply and demand. The time lag is not going to change that, it just changes how forward looking you need to be (or how much lower your expectations of hitting your target should be).
    - sobellian 3y ago
      All models are wrong, some are useful. I took EE in college. Circuits are laughably more complicated than a linear circuits class might lead you to believe. Other engineers are taught the drag equation. It technically includes "all the other important factors" but only because they stuff it all into the drag coefficient. Back to EE. In fields and waves you are shown how light is a wave. They don't take the opportunity to jump into a full unit on QM. For pedagogical reasons people teach foundational concepts first. In this thread there seem to be many people who are unaware of what actual economists do, what they are capable of, but are quite confident they have it all wrong.
    - kelseyfrog 3y ago
      The human mind naturally seeks clarity and confidence over correctness. Once you realize this, this and much more make a lot more sense.
  - yawpitch 3y ago
    I see a whole lot of confirmation bias and circular reasoning in that statement, which makes supply and demand sound an awful lot like phlogistons, the luminiferous ether, epicycles, and other famous fudge factors that millennia of humans have used to maintain their neither testable or falsifiable worldviews. Swap out just a few phrases and we’re at insufficient faith being why the Messiah didn’t return as predicted.
    - sobellian 3y ago
      So to be clear, S&D is a statement about market prices at equilibrium, i.e. the steady state. Parent pointed out that transient effects matter. Not sure how you got from that to circular reasoning.
      - yawpitch 3y ago
        To paraphrase, “if you don’t see the immediate effects of S&D, wait for the eventual effects of S&D”… this can only be said by someone who already believes S&D is reliably reproducible.
        sobellian 3y ago
        This is no more circular than the observation that an RC circuit has a settling time. If you want a reliable instant reproduction of S&D, they exist. In college I had a lecture where the students were given a role (producer or consumer) and a budget, and the price indeed converged as predicted (despite my best efforts to set up a cartel of producers). Just don't expect the US economy to cooperate and provide a controlled lab setting.
passwordoops 3y ago
I was shocked when I learned the current economic models don't even account for energy inputs. Supposedly if you decide all energy inputs suddenly stop, GDP is predicted to drop on the order of 5-10% instead of, say, cease to exist
- mpreda 3y ago
  The economic models are concerned with accurately modelling the impact of normal/expected events/variations. The event you propose is not one worth modelling (being impossible).
- RandomLensman 3y ago
  I don't think most typical GDP models are designed for situations were large parts of the population will die. Models are also likely not to be designed to accurately reflect the result of a large nuclear war, for example. Typical models will account for energy price and elasticity, though, and if you want models for more catastrophic situations then those exist, but it's a different type of modelling.
  - dandy23 3y ago
    The problem with economic models is that they remove almost all parameters except a few. But the removed parameters account for like 90% of the outcome. That's the only way you can create models of something as complex as society. It's way more complex and chaotic than weather and still economists think they can predict months and years into the future.
    - RandomLensman 3y ago
      For smaller economies modelling some months into the future is actually pretty decently possible. Of course, there could always be big events throwing everything in a new state. There are also very very granular models.
      - flakeoil 3y ago

yawpitch 3y ago

I don’t think even supply and demand is reliably reproducible in real world conditions, at least not in the way vinegar + baking soda is reliable.

lotsofpulp 3y ago
People expect supply and demand to show its effects immediately, whereas it takes years in some markets due to things like sticky prices in things like wages or overwhelming demand relative to supply and hence underestimating the amount of additional supply needed.
- sumtechguy 3y ago
  That is in next years budget
- flakeoil 3y ago
  But why simplify it into a simple supply and demand curve when at the end it means nothing because you did not include all the other important factors?
  - lotsofpulp 3y ago
    The root causes are still supply and demand. The time lag is not going to change that, it just changes how forward looking you need to be (or how much lower your expectations of hitting your target should be).
  - sobellian 3y ago
    All models are wrong, some are useful. I took EE in college. Circuits are laughably more complicated than a linear circuits class might lead you to believe. Other engineers are taught the drag equation. It technically includes "all the other important factors" but only because they stuff it all into the drag coefficient. Back to EE. In fields and waves you are shown how light is a wave. They don't take the opportunity to jump into a full unit on QM. For pedagogical reasons people teach foundational concepts first. In this thread there seem to be many people who are unaware of what actual economists do, what they are capable of, but are quite confident they have it all wrong.
  - kelseyfrog 3y ago
    The human mind naturally seeks clarity and confidence over correctness. Once you realize this, this and much more make a lot more sense.
- yawpitch 3y ago
  I see a whole lot of confirmation bias and circular reasoning in that statement, which makes supply and demand sound an awful lot like phlogistons, the luminiferous ether, epicycles, and other famous fudge factors that millennia of humans have used to maintain their neither testable or falsifiable worldviews. Swap out just a few phrases and we’re at insufficient faith being why the Messiah didn’t return as predicted.
  - sobellian 3y ago
    So to be clear, S&D is a statement about market prices at equilibrium, i.e. the steady state. Parent pointed out that transient effects matter. Not sure how you got from that to circular reasoning.
    - yawpitch 3y ago
      To paraphrase, “if you don’t see the immediate effects of S&D, wait for the eventual effects of S&D”… this can only be said by someone who already believes S&D is reliably reproducible.
      - sobellian 3y ago
        This is no more circular than the observation that an RC circuit has a settling time. If you want a reliable instant reproduction of S&D, they exist. In college I had a lecture where the students were given a role (producer or consumer) and a budget, and the price indeed converged as predicted (despite my best efforts to set up a cartel of producers). Just don't expect the US economy to cooperate and provide a controlled lab setting.

passwordoops 3y ago

I was shocked when I learned the current economic models don't even account for energy inputs. Supposedly if you decide all energy inputs suddenly stop, GDP is predicted to drop on the order of 5-10% instead of, say, cease to exist

mpreda 3y ago
The economic models are concerned with accurately modelling the impact of normal/expected events/variations. The event you propose is not one worth modelling (being impossible).
RandomLensman 3y ago
I don't think most typical GDP models are designed for situations were large parts of the population will die. Models are also likely not to be designed to accurately reflect the result of a large nuclear war, for example. Typical models will account for energy price and elasticity, though, and if you want models for more catastrophic situations then those exist, but it's a different type of modelling.
- dandy23 3y ago
  The problem with economic models is that they remove almost all parameters except a few. But the removed parameters account for like 90% of the outcome. That's the only way you can create models of something as complex as society. It's way more complex and chaotic than weather and still economists think they can predict months and years into the future.
  - RandomLensman 3y ago
    For smaller economies modelling some months into the future is actually pretty decently possible. Of course, there could always be big events throwing everything in a new state. There are also very very granular models.
    - flakeoil 3y ago