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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
by 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 agoTo 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 agoThis 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.