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Ding ding ding "All models are wrong, some are useful"; Why should I care what the ATL Fed's GDPNow model predicts? By all accounts a mathematical model is onl
by nimish 2y ago
Ding ding ding
"All models are wrong, some are useful"; Why should I care what the ATL Fed's GDPNow model predicts? By all accounts a mathematical model is only as good as its assumptions and we know even the best economic models have spherical cow level assumptions
- whatshisface 2y agoMathematical models are so inflexible and unresponsive to real-world, commonsense facts, that as far as I know the value of what's in my pocket goes up at the grocery store. What we need is a grounded, grassroots approach to banking that eschews the elitism of sums involving numbers that, as far as anyone knows, are no more real than Plato's perfect spheres.
- FredPret 2y agoSome of these numbers are nearly impossible to measure because: - tech gets better - products move upmarket as companies target richer customers - sometimes, products move downmarket and gets worse - products fall out of use and new ones take their place With something like TV's, we can clearly see deflation at work. Your dollar buys vastly more TV than in 1990. But what about education? That's nearly impossible to measure because we're learning different things. So if the price goes up by, say, 100%, how do we offset that against the nearly unmeasurable change in value? You can see why economists resort to measuring Platonic, spherical eggs.
- whatshisface 2y agoThis is a GDP "nowcast," which only involves measurable numbers. The main criticism of GDP is that by focusing on the exchange of currency, it underestimates barter and social exchanges such as are prevalent in developing countries and Bethesda's Fallout series.
- dgfitz 2y ago> But what about education? That's nearly impossible to measure because we're learning different things. At least at the college I attended, what you studied had zero correlation to the cost, every full-time student paid the “same” tuition as everyone else.
- bee_rider 2y agoWithout using any elitist numbers, can you express the odds that somebody will miss this parody?
- JumpCrisscross 2y agoI’m missing the source (and don’t know if I know it), but am curious :P
- bee_rider 2y agoI don’t know if it is a quote or meme or anything like that, it might just be some bespoke hand-crafted parody.
- stouset 2y agoIf you have a better idea, a literal Nobel prize awaits.
- jredwards 2y agoAh, but you're wrong. The "Nobel Prize" for Economics is actually not a literal Nobel Prize but one established by the Nobel committee after Alfred Nobel's death which has some distinctions making it different from the others. But that's all just me being pedantic :) https://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences https://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Econom...
- stouset 2y agoA literal one but perhaps not an original, authentic one :)
- ummonk 2y agoGDP itself is a mathematical model too - just a much more sophisticated one which utilizes more data.
- JumpCrisscross 2y ago> GDP itself is a mathematical model GDP is a metric. The specific way in which we construct it is based on a small zoo of models, each working to estimate a myriad of parameters.
- gruez 2y agoIt's estimated via a model. We don't actually know the value of all economic activities happening in the country. We just have statisticians survey some fraction of businesses on how they're doing, and plug those result into a model to estimate how the entire country's doing.
- JumpCrisscross 2y ago> It's estimated via a model So is every physical constant. The gravitational constant is a metric. We then measure it by way of models. GDP isn’t a model per se. GDPNow is.