5 ms·

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 accu

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
    How do you know? Do you seriously mean that smaller economies can be modelled several months into the future with accuracy and be correct more than 50% of the time?
    - RandomLensman 3y ago
      Yes, because people do these kinds of analyses (e.g., https://www.snb.ch/public/publication/en/www-snb-ch/publications/research/quarterly-bulletin-studies/2002/09/quartbul_2002_3_b/0_en/quartbul_2002_3_b.en.pdf https://www.snb.ch/public/publication/en/www-snb-ch/publicat...) ("50%" might not always be the right way to look at things, but I assume you mean something better than random or previous.)
      - flakeoil 3y ago
        That study kind of proves that economics is not a science. Not even the "true" value they want to compare their forecast with is correct. It's also just an estimate. Complete nonsense. "To assess the quality of the forecasts, they are compared with the actual GDP figures. Since GDP is normally revised several times, it is necessary to decide which figure to take as the outcome. Following the literature, we use the first available estimate for real GDP growth. In our case, this is the annual average calculated by the State Secretariat for Economic Affairs (seco) in March of each year on the basis of its quarterly estimates.2"
        RandomLensman 3y ago
        GDP is always an "estimate", not sure what your issue is. What specifically do you dislike about this estimate? Physics isn't "complete nonsense" just because we don't know the exact mass of a proton but rather have some small uncertainty there.
        flakeoil 3y ago
        The main problem is that GDP can and is defined in so many different ways and massaged and changed to anyones liking. Same with inflation. It's hard to measure correctly in the first place and becomes even more useless as it is defined differently at every occasion or when it does not match whatever one tries to achieve.
        RandomLensman 3y ago
        Any forecast of GDP or inflation is then nonsense by definition as the numbers are meaningless?
        flakeoil 3y ago
        Yes, that's right. Just look at the clueless central banks.
fuzzfactor 3y ago
>I don't think most typical GDP models are designed for situations were large parts of the population will die. This was once an essential consideration in historical times, but never the main thing on the bargaining table even then. Now it would be the extreme case, but the current system is still designed to handle it. No differently than when large parts of the population (but not rising to the level beyond a voting minority) are systematically excluded from future ongoing prosperity by periodic debasement and/or devaluation of their labor, and the currency or medium of exchange, credit, and accounting that goes with it. Never to be heard from again, since they are no longer a part of the economic system like they were the day before.
- RandomLensman 3y ago
  The current system isn't designed for a shutdown of all energy supplies or quickly losing larger parts of the population. What portions and where of the population are not part of the economic system?
  - fuzzfactor 3y ago
    Over the last few years, millions of Americans if not tens of millions who had been on the margins of economic stability, have now been inflated across the divide over onto the slope of economic uncertainty. It can be a subtle difference since neither one is a very good position to be in. But it's a slippery slope and those that can get back to where they were will be a result of overcoming a downward force that was not a factor just a few years ago. And those that do will still not be in a very good position to be in. For the rest, fuggedaboudit. I get your point though. I would say a few million more consumers becoming much further drained doesn't have anywhere near the chilling effect on Wall Street that you would get from a total energy shutdown or losing the same millions in a mass die-off, true. It's just a step in that direction but I do think the same faulty equations would be clung to, long after their unrealistic calculations have compounded beyond recovery. And surprise people at how soon a downward spiral could occur without any sign of immediate threat, since there's no system in place to give any warning until downward momentum has become dominant enough to be well-registered. When it's more likely to already be too late. With energy the closest thing in memory may be the way oil drilling was cut in half at the end of 1981. That's nothing like a total shutdown but it was significant. It was an emergency, if they hadn't crashed the price, alternative energy would be 40 years ahead of where it is now. Turned out only to be a speed bump for Wall Street and here we are.

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
  How do you know? Do you seriously mean that smaller economies can be modelled several months into the future with accuracy and be correct more than 50% of the time?
  - RandomLensman 3y ago
    Yes, because people do these kinds of analyses (e.g., https://www.snb.ch/public/publication/en/www-snb-ch/publications/research/quarterly-bulletin-studies/2002/09/quartbul_2002_3_b/0_en/quartbul_2002_3_b.en.pdf https://www.snb.ch/public/publication/en/www-snb-ch/publicat...) ("50%" might not always be the right way to look at things, but I assume you mean something better than random or previous.)
    - flakeoil 3y ago
      That study kind of proves that economics is not a science. Not even the "true" value they want to compare their forecast with is correct. It's also just an estimate. Complete nonsense. "To assess the quality of the forecasts, they are compared with the actual GDP figures. Since GDP is normally revised several times, it is necessary to decide which figure to take as the outcome. Following the literature, we use the first available estimate for real GDP growth. In our case, this is the annual average calculated by the State Secretariat for Economic Affairs (seco) in March of each year on the basis of its quarterly estimates.2"
      - RandomLensman 3y ago
        GDP is always an "estimate", not sure what your issue is. What specifically do you dislike about this estimate? Physics isn't "complete nonsense" just because we don't know the exact mass of a proton but rather have some small uncertainty there.
        flakeoil 3y ago
        The main problem is that GDP can and is defined in so many different ways and massaged and changed to anyones liking. Same with inflation. It's hard to measure correctly in the first place and becomes even more useless as it is defined differently at every occasion or when it does not match whatever one tries to achieve.
        RandomLensman 3y ago
        Any forecast of GDP or inflation is then nonsense by definition as the numbers are meaningless?
        flakeoil 3y ago
        Yes, that's right. Just look at the clueless central banks.

fuzzfactor 3y ago

>I don't think most typical GDP models are designed for situations were large parts of the population will die. This was once an essential consideration in historical times, but never the main thing on the bargaining table even then. Now it would be the extreme case, but the current system is still designed to handle it. No differently than when large parts of the population (but not rising to the level beyond a voting minority) are systematically excluded from future ongoing prosperity by periodic debasement and/or devaluation of their labor, and the currency or medium of exchange, credit, and accounting that goes with it. Never to be heard from again, since they are no longer a part of the economic system like they were the day before.

RandomLensman 3y ago
The current system isn't designed for a shutdown of all energy supplies or quickly losing larger parts of the population. What portions and where of the population are not part of the economic system?
- fuzzfactor 3y ago
  Over the last few years, millions of Americans if not tens of millions who had been on the margins of economic stability, have now been inflated across the divide over onto the slope of economic uncertainty. It can be a subtle difference since neither one is a very good position to be in. But it's a slippery slope and those that can get back to where they were will be a result of overcoming a downward force that was not a factor just a few years ago. And those that do will still not be in a very good position to be in. For the rest, fuggedaboudit. I get your point though. I would say a few million more consumers becoming much further drained doesn't have anywhere near the chilling effect on Wall Street that you would get from a total energy shutdown or losing the same millions in a mass die-off, true. It's just a step in that direction but I do think the same faulty equations would be clung to, long after their unrealistic calculations have compounded beyond recovery. And surprise people at how soon a downward spiral could occur without any sign of immediate threat, since there's no system in place to give any warning until downward momentum has become dominant enough to be well-registered. When it's more likely to already be too late. With energy the closest thing in memory may be the way oil drilling was cut in half at the end of 1981. That's nothing like a total shutdown but it was significant. It was an emergency, if they hadn't crashed the price, alternative energy would be 40 years ahead of where it is now. Turned out only to be a speed bump for Wall Street and here we are.