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Real Chaos, Today – Randomised controlled trials in economics

tomrod 2y ago
Informationally, this post lands on information regarding randomized controlled trials (RCTs). However, there isn't a specific thesis I can nail down outside of introducing a general audience to the history and philosophy of RCTs. There is some discussion regarding how they aren't a panacea, but its more of an afterthought.
- ordu 2y ago
  I really liked Judea Pearl take on RCTs in his "The Book of Why". It is not much of the history or philosophy, but he show why RCTs works, why randomness do the trick, he does it from the standpoint of a wider theory of a causation that can explain not just RCT but also other methods of untangling causes and effects, and therefore it becomes easy to him to talk why RCTs may not work.
  - tomrod 2y ago
    Aye, Pearl's explanation and textbook Causality are fantastic.
thriftwy 2y ago
At this point you could just simulate complete economies on a PC. A medium sized country has 10M people doing ten transactions per day on average. Why have mathematical models when you only ever need to add and subtract.
- hnhg 2y ago
  Adding and subtracting are insufficient for models that are probabilistic and have interconnected dependencies (graphs).
  - thriftwy 2y ago
    It may be probabilistic in tx matching but you can simulate every transaction precisely. Not sure I understand the latter argument.
    - RandomLensman 2y ago
      I don't think we have sufficient models as to why each transaction happens or not. For example, why did someone buy blueberries instead of raspberries?
      - thriftwy 2y ago
        That's only tangentially related to economics. There are no economic reasons why I prefer TBS to FPS games.
        RandomLensman 2y ago
        That is what economics is about in no small part: preferences, their pricing and expression. The pure movement of money isn't particularly interesting.
        thriftwy 2y ago
        The pure movement of money is interesting as long as we have economic crashes happening from time to time that we don't predict. Preferences and pricing is marketing, not purely economics.
        RandomLensman 2y ago
        Movement of money isn't causing crashes, but, for example changes in preferences who to move it to or not. What do you think economics is about if it doesn't include preferences and their expression. Btw., we have nearly endless information on the movement of money and credit.
    - 2y ago

Informationally, this post lands on information regarding randomized controlled trials (RCTs). However, there isn't a specific thesis I can nail down outside of introducing a general audience to the history and philosophy of RCTs. There is some discussion regarding how they aren't a panacea, but its more of an afterthought.

ordu 2y ago
I really liked Judea Pearl take on RCTs in his "The Book of Why". It is not much of the history or philosophy, but he show why RCTs works, why randomness do the trick, he does it from the standpoint of a wider theory of a causation that can explain not just RCT but also other methods of untangling causes and effects, and therefore it becomes easy to him to talk why RCTs may not work.
- tomrod 2y ago
  Aye, Pearl's explanation and textbook Causality are fantastic.

thriftwy 2y ago

At this point you could just simulate complete economies on a PC. A medium sized country has 10M people doing ten transactions per day on average. Why have mathematical models when you only ever need to add and subtract.

hnhg 2y ago
Adding and subtracting are insufficient for models that are probabilistic and have interconnected dependencies (graphs).
- thriftwy 2y ago
  It may be probabilistic in tx matching but you can simulate every transaction precisely. Not sure I understand the latter argument.
  - RandomLensman 2y ago
    I don't think we have sufficient models as to why each transaction happens or not. For example, why did someone buy blueberries instead of raspberries?
    - thriftwy 2y ago
      That's only tangentially related to economics. There are no economic reasons why I prefer TBS to FPS games.
      - RandomLensman 2y ago
        That is what economics is about in no small part: preferences, their pricing and expression. The pure movement of money isn't particularly interesting.
        thriftwy 2y ago
        The pure movement of money is interesting as long as we have economic crashes happening from time to time that we don't predict. Preferences and pricing is marketing, not purely economics.
        RandomLensman 2y ago
        Movement of money isn't causing crashes, but, for example changes in preferences who to move it to or not. What do you think economics is about if it doesn't include preferences and their expression. Btw., we have nearly endless information on the movement of money and credit.
  - 2y ago