4 ms·

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.

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.