5 ms·

Can anyone give me a fair example of something positive produced of of economics? Some sort of phenomenon we didn't understand before? If it's a science, which

by atmosx 13y ago

Can anyone give me a fair example of something positive produced of of economics? Some sort of phenomenon we didn't understand before? If it's a science, which is ridiculous to believe so, what good has done to the human kind? Competing chemistry and physics or engineering to math is hilarious. The logistics of a large magazine can be easily handled by someone who has never has no idea about "economics". Would trust a non-architect to build you a house? Or a physician who has no idea about chemistry? A cryptographer that doesn't know what a prime is? Blah...

Mikeb85 13y ago
The effects of welfare and various forms of economic stimuli? The effects of international trade, currency and central bank policies? And of course, large investment banks derive alot of benefit from the study of economics. Was just listening to Abby Joseph Cohen on Bloomberg radio yesterday - she's an economist and a senior investment strategist at Goldman Sachs - they obviously make alot of money through understanding economics and making correct predictions. While you can argue about the benefit to society, it's clear that economics can produce prediction models that work.
- dalai 13y ago
  Do they actually have prediction models that work? Goldman Sachs is not an outside observer. Every time they make a public prediction they are also affecting the outcome. The same goes for several well-known economists. Even if the prediction is not public, Goldman Sachs is quite capable of influencing a lot of people to get the outcome it wants.
  - Mikeb85 13y ago
    > Do they actually have prediction models that work? The proof is in the proverbial pudding - they trade on their prediction models, and make money.
    - mrow84 13y ago
      Your claimed proof ignores dalai's point: that Goldman Sachs' predictions affect the system they are making 'predictions' about. If I predict you are going to get a nosebleed, and then punch you in the face, it's a bit disingenuous for me to claim that I have gained insight into the general causes of nosebleeds, isn't it?
      - Mikeb85 13y ago
        While Goldman Sachs is big, they're not big enough to move the markets on their own. No single firm is. The idea that firms move entire markets is pure fantasy. Depending on liquidity they might move a single security one way or another (some stocks trade such little volume that YOU can move their price on your own), but not entire sectors, never mind the entire economy.
- atmosx 13y ago
  First thing: Goldman Sachs makes a lot of money because they are making the rules, not because they are good at anything. Secondly: The economist Stimuli to which you are referring, and the effects of international trade can be read up-down-sideways depending on which part of the Earth you live. They are not universally good as a huge part of the USA-EU middle class believes. If the USA were not imposing rules that give an extremely unfair advantage to USA (oil for example) corps, they may not be so omnipotent. That said, Goldman Sachs is really the worst example I can think of. Even in Lehman's case, the USA gov let Lehman fail but GS was too big to fail. Paulson (ex-GS) called Blackfain (Goldman Sachs CEO) in order to examine Lehman's book because he knew better. Of course Blackfain and Paulson (who had huge amounts of stock of at GS) decided to let Lehman fail and create a huge gap at the market, while saving AIG who owed money to GS and GS of course. Indirectly, they ensured huge profits for GS by killing the competition and that... Now, what economics have to do with GS and the financial sector is beyond me. I don't see any theories applied there... It's all monopoly, a win-win situation: You buy high-ROI financial products and if things get out of hand, don't worry: You're too big to fail ;-) that's one hell of an economic theory. Too bad you can't apply it elsewhere... (oh yes, there are no laws that can be bend in chemistry or physics...)
  - Mikeb85 13y ago
    Your knowledge of GS' history and the banking/investment sector in general is terrible. > the USA gov let Lehman fail but GS was too big to fail GS made a killing by short selling mortgage-backed securities right before the housing crisis. They made 11 billion in 2007, 2 billion in 2008, and 13 billion in 2009. > Paulson (ex-GS) called Blackfain (Goldman Sachs CEO)... decided to let Lehman fail.... First, it's Blankfein. Second, GS did short Lehman shares because they knew the business was in trouble... > Now, what economics have to do with GS and the financial sector is beyond me. Economics is the science that people in the finance sector use to create predictive models about the worldwide economy, so that they can predict company earnings, eventually leading to predictions concerning securities pricing, leading to trading strategies. Investment banks employ more economists than any other sector. That's why it matters. Your conspiracy theories are interesting, but nonsensical. Anyhow, I used Goldman Sachs as an example because I listened to one of their economists talk on the radio last night. Just happened to be on my mind.
LukeWalsh 13y ago
You can't dismiss an entire subject matter as nonscientific just because many of the major players aren't advocating scientific methods of exploration. At its root, science is about testing, observing, forming conclusions, and retesting. It just so happens that in the subject of economics you have an extremely large number of variables because of human behavior. While concrete conclusions are difficult to come by, we should absolutely continue trying to understand things that we do not currently. Consider a future where the entire human brain could be mapped, and we entirely understood behavior. In this case studying economics and decision making would be much more realistic. Just because our tools are extremely limited doesn't mean we should stop observing, and that very act is true science.
- deleted 13y ago
  [deleted]
- wuliwong 13y ago
  I'm not sure as to what defines a field as "science" nor do I found it a very interesting question. What I do find interesting is the desire to apply the scientific method in economics. The issue comes with the "testing" portion of the method. One is unable to setup economic experiments to perform these tests. Economists can make claims about historical events but they must a priori decide which data to ignore and which to include in their analysis. Things like this lead to two seemingly cogent, logical analysis of the great depression with one concluding that the Fed was the cause of the depression and another claiming it to be the savior. They both may have sound logic but their a priori assumptions were different. In physics, you rarely have this scenario as experimentalists can setup artificial testing situation where they have control over how variables change. They can systematically change variables and observe the effects. A great deal of the work in physics goes into the explanation of the magnitude of effect variables have on results, largely to justify why certain effects can be ignored. Ludwig von Mises wrote extensively about the problem attempting to apply the scientific method economics. He felt economics was fundamentally different from a field of study such as physics. I tend to agree with this. Side note, I have a Ph.D. in physics and am just an amateur economist. :)
  - 13y ago
pseut 13y ago
>Can anyone give me a fair example of something positive produced of of economics? Some sort of phenomenon we didn't understand before? Gains from trade between two countries even if one of them has an absolute advantage in producing every good.
- firstOrder 13y ago
  The idea of comparative advantage for trade between countries was first spelled out in 1817 by David Ricardo in "On the Principles of Political Economy and Taxation". He used the example of the Portuguese trading their wine for English cloth, and said that it was to both countries advantage to be engaged in such free trade. Well, two centuries later, how did that wind up? As Joan Robinson pointed out "the imposition of free trade on Portugal killed off a promising textile industry and left her with a slow-growing export market for wine, while for England, exports of cotton cloth led to accumulation, mechanisation and the whole spiralling growth of the industrial revolution". In science, theories have to follow the data, the real world, reality. In economics, the examples and data have to be twisted to fit the theories. The OP article said the author article has a Nobel Prize in economics which of course if false, Nobel's bequeath to his prize foundation included Physiology/Medicine, Peace, Chemistry etc. but not economics - after he died people invented an economics prize and stuck Nobel's name on it so to try to give it the allure given to the other prizes. Economics uses to be called in more honest times political economy, that it was given the more scientific name economics or economic sciences was a sign of it becoming less scientific - Ricardo may have been wrong about comparative advantage, but at least he tried to take an honest look at the economy. Nowadays the theories he made which were disproved by history are held up as models, while his better ideas have been supposedly "debunked". Economics is not a science. In its normal form it's mostly a propaganda arm for some force in society trying to justify its actions. I suppose in some sense economics could be a science, but only in the sense of being a branch of anthropology dealing with political goings on - a branch of anthropology the study of which would itself be highly politicized. One reason science works is that no astronomist gains or loses by saying the next nearest star than the sun is Proxima Centauri. It is light years away, and has little effect on things, and thus objective observation and scientific consensus are easy to achieve. If a star closer than Proxima Centauri were observed, after some time needed for verification, surely the entire astronomical and scientific community would get behind the idea that the newly observed is now the second closest star to earth. Economics fundamentally deals with the question of how the pie gets divided up, in which case scientific consensus is impossible and objectivity goes out the window. It is one of the rare subjects on which you're better off reading the material from two centuries ago - Adam Smith, David Ricardo, Benjamin Franklin, Jean-Baptiste Say, John Stuart Mill etc. - then that of today, because they were generally objective and fair, while most economic writing today is either partisan, or written under the influence of highly partisan ideas.
ysn77 13y ago
You are clearly ignorant about economics. Would you trust a non-economist to manage monetary policy?
- icebraining 13y ago
  I wouldn't, but I'm not sure I'd trust an economist either.
- atmosx 13y ago
  No you are clearly disillusioned if you believe that an economist understand is the only one who can run a monetary policy. Understanding how currencies work is not easy to grasp at first, but surely any educated man will do. And what does this has to do economics being a science anyway? Do you think that if you will apply the same economic policies in two different nations, you will get the same result? Please, don't make me laugh. Theories are made to explain outcomes and every school (Austrians, Socialists, Communists) justify their failures by trying to explain things that they totally don't understand.
xiaohanzhang14 13y ago
You win the prize for the most ignorant question of the week! First, a science tests and explains natural phenomena. I'll draw from all walks of life to display the good it's done for human kind: - Personal Finance: How do we know diversifying your investments gives you the optimal risk-reward in a given timeline? - Public Policy: Why do governments prevent monopolies from forming? - Jobs: Why do you have a specific job title instead of being a Jack of All Trades? - (American) Football: Why do most coaches punt on fourth down, even when they shouldn't? (risk aversion) - Population: Why has the birth rate been declining? Second, your analogies make little sense. The architect doesn't build the house, the construction crew does. Regardless, each specialty (hmm, that specialization again?) plays an important role in building a house. Blah...
- deleted 13y ago
  [deleted]
- atmosx 13y ago
  > Personal Finance: How do we know diversifying your investments gives you the optimal risk-reward in a given timeline? You mean that you have to study in order to to come with a straight answer right? Study economics OR do the math? Public policy: I don't know why monopolies should not be formed. But I guess you do, right? :-) Care to explain? > Jobs: Why do you have a specific job title instead of being a Jack of All Trades? You probably see a connection among Jack-of-All-Trades and economics as a scientific field, which I do not. Enlighten moi please. > Population: Why has the birth rate been declining? Because they apply policies based on things that politicians and other ignorants (economists) think they understand, when the examples we have at hand shows they clearly DO NOT understand the how and the why. All they offer is a translation after their policy had failed miserably for the n-th time. > Second, your analogies make little sense. The architect doesn't build the house, the construction crew does. Regardless, each specialty (hmm, that specialization again?) plays an important role in building a house. Really? Have you take a closer look at Wall Street to see how many % of the population working there (financial sector) studied economics and not physics or some other math-intensive science? How many doctors do you know without a degree in medicine but with a degree in physics?

by atmosx 13y ago

Mikeb85 13y ago

The effects of welfare and various forms of economic stimuli? The effects of international trade, currency and central bank policies? And of course, large investment banks derive alot of benefit from the study of economics. Was just listening to Abby Joseph Cohen on Bloomberg radio yesterday - she's an economist and a senior investment strategist at Goldman Sachs - they obviously make alot of money through understanding economics and making correct predictions. While you can argue about the benefit to society, it's clear that economics can produce prediction models that work.

dalai 13y ago
Do they actually have prediction models that work? Goldman Sachs is not an outside observer. Every time they make a public prediction they are also affecting the outcome. The same goes for several well-known economists. Even if the prediction is not public, Goldman Sachs is quite capable of influencing a lot of people to get the outcome it wants.
- Mikeb85 13y ago
  > Do they actually have prediction models that work? The proof is in the proverbial pudding - they trade on their prediction models, and make money.
  - mrow84 13y ago
    Your claimed proof ignores dalai's point: that Goldman Sachs' predictions affect the system they are making 'predictions' about. If I predict you are going to get a nosebleed, and then punch you in the face, it's a bit disingenuous for me to claim that I have gained insight into the general causes of nosebleeds, isn't it?
    - Mikeb85 13y ago
      While Goldman Sachs is big, they're not big enough to move the markets on their own. No single firm is. The idea that firms move entire markets is pure fantasy. Depending on liquidity they might move a single security one way or another (some stocks trade such little volume that YOU can move their price on your own), but not entire sectors, never mind the entire economy.
atmosx 13y ago
First thing: Goldman Sachs makes a lot of money because they are making the rules, not because they are good at anything. Secondly: The economist Stimuli to which you are referring, and the effects of international trade can be read up-down-sideways depending on which part of the Earth you live. They are not universally good as a huge part of the USA-EU middle class believes. If the USA were not imposing rules that give an extremely unfair advantage to USA (oil for example) corps, they may not be so omnipotent. That said, Goldman Sachs is really the worst example I can think of. Even in Lehman's case, the USA gov let Lehman fail but GS was too big to fail. Paulson (ex-GS) called Blackfain (Goldman Sachs CEO) in order to examine Lehman's book because he knew better. Of course Blackfain and Paulson (who had huge amounts of stock of at GS) decided to let Lehman fail and create a huge gap at the market, while saving AIG who owed money to GS and GS of course. Indirectly, they ensured huge profits for GS by killing the competition and that... Now, what economics have to do with GS and the financial sector is beyond me. I don't see any theories applied there... It's all monopoly, a win-win situation: You buy high-ROI financial products and if things get out of hand, don't worry: You're too big to fail ;-) that's one hell of an economic theory. Too bad you can't apply it elsewhere... (oh yes, there are no laws that can be bend in chemistry or physics...)
- Mikeb85 13y ago
  Your knowledge of GS' history and the banking/investment sector in general is terrible. > the USA gov let Lehman fail but GS was too big to fail GS made a killing by short selling mortgage-backed securities right before the housing crisis. They made 11 billion in 2007, 2 billion in 2008, and 13 billion in 2009. > Paulson (ex-GS) called Blackfain (Goldman Sachs CEO)... decided to let Lehman fail.... First, it's Blankfein. Second, GS did short Lehman shares because they knew the business was in trouble... > Now, what economics have to do with GS and the financial sector is beyond me. Economics is the science that people in the finance sector use to create predictive models about the worldwide economy, so that they can predict company earnings, eventually leading to predictions concerning securities pricing, leading to trading strategies. Investment banks employ more economists than any other sector. That's why it matters. Your conspiracy theories are interesting, but nonsensical. Anyhow, I used Goldman Sachs as an example because I listened to one of their economists talk on the radio last night. Just happened to be on my mind.

LukeWalsh 13y ago

You can't dismiss an entire subject matter as nonscientific just because many of the major players aren't advocating scientific methods of exploration. At its root, science is about testing, observing, forming conclusions, and retesting. It just so happens that in the subject of economics you have an extremely large number of variables because of human behavior. While concrete conclusions are difficult to come by, we should absolutely continue trying to understand things that we do not currently. Consider a future where the entire human brain could be mapped, and we entirely understood behavior. In this case studying economics and decision making would be much more realistic. Just because our tools are extremely limited doesn't mean we should stop observing, and that very act is true science.

deleted 13y ago
[deleted]
wuliwong 13y ago
I'm not sure as to what defines a field as "science" nor do I found it a very interesting question. What I do find interesting is the desire to apply the scientific method in economics. The issue comes with the "testing" portion of the method. One is unable to setup economic experiments to perform these tests. Economists can make claims about historical events but they must a priori decide which data to ignore and which to include in their analysis. Things like this lead to two seemingly cogent, logical analysis of the great depression with one concluding that the Fed was the cause of the depression and another claiming it to be the savior. They both may have sound logic but their a priori assumptions were different. In physics, you rarely have this scenario as experimentalists can setup artificial testing situation where they have control over how variables change. They can systematically change variables and observe the effects. A great deal of the work in physics goes into the explanation of the magnitude of effect variables have on results, largely to justify why certain effects can be ignored. Ludwig von Mises wrote extensively about the problem attempting to apply the scientific method economics. He felt economics was fundamentally different from a field of study such as physics. I tend to agree with this. Side note, I have a Ph.D. in physics and am just an amateur economist. :)
- 13y ago

pseut 13y ago

>Can anyone give me a fair example of something positive produced of of economics? Some sort of phenomenon we didn't understand before? Gains from trade between two countries even if one of them has an absolute advantage in producing every good.

firstOrder 13y ago
The idea of comparative advantage for trade between countries was first spelled out in 1817 by David Ricardo in "On the Principles of Political Economy and Taxation". He used the example of the Portuguese trading their wine for English cloth, and said that it was to both countries advantage to be engaged in such free trade. Well, two centuries later, how did that wind up? As Joan Robinson pointed out "the imposition of free trade on Portugal killed off a promising textile industry and left her with a slow-growing export market for wine, while for England, exports of cotton cloth led to accumulation, mechanisation and the whole spiralling growth of the industrial revolution". In science, theories have to follow the data, the real world, reality. In economics, the examples and data have to be twisted to fit the theories. The OP article said the author article has a Nobel Prize in economics which of course if false, Nobel's bequeath to his prize foundation included Physiology/Medicine, Peace, Chemistry etc. but not economics - after he died people invented an economics prize and stuck Nobel's name on it so to try to give it the allure given to the other prizes. Economics uses to be called in more honest times political economy, that it was given the more scientific name economics or economic sciences was a sign of it becoming less scientific - Ricardo may have been wrong about comparative advantage, but at least he tried to take an honest look at the economy. Nowadays the theories he made which were disproved by history are held up as models, while his better ideas have been supposedly "debunked". Economics is not a science. In its normal form it's mostly a propaganda arm for some force in society trying to justify its actions. I suppose in some sense economics could be a science, but only in the sense of being a branch of anthropology dealing with political goings on - a branch of anthropology the study of which would itself be highly politicized. One reason science works is that no astronomist gains or loses by saying the next nearest star than the sun is Proxima Centauri. It is light years away, and has little effect on things, and thus objective observation and scientific consensus are easy to achieve. If a star closer than Proxima Centauri were observed, after some time needed for verification, surely the entire astronomical and scientific community would get behind the idea that the newly observed is now the second closest star to earth. Economics fundamentally deals with the question of how the pie gets divided up, in which case scientific consensus is impossible and objectivity goes out the window. It is one of the rare subjects on which you're better off reading the material from two centuries ago - Adam Smith, David Ricardo, Benjamin Franklin, Jean-Baptiste Say, John Stuart Mill etc. - then that of today, because they were generally objective and fair, while most economic writing today is either partisan, or written under the influence of highly partisan ideas.

ysn77 13y ago

You are clearly ignorant about economics. Would you trust a non-economist to manage monetary policy?

icebraining 13y ago
I wouldn't, but I'm not sure I'd trust an economist either.
atmosx 13y ago
No you are clearly disillusioned if you believe that an economist understand is the only one who can run a monetary policy. Understanding how currencies work is not easy to grasp at first, but surely any educated man will do. And what does this has to do economics being a science anyway? Do you think that if you will apply the same economic policies in two different nations, you will get the same result? Please, don't make me laugh. Theories are made to explain outcomes and every school (Austrians, Socialists, Communists) justify their failures by trying to explain things that they totally don't understand.

xiaohanzhang14 13y ago

You win the prize for the most ignorant question of the week! First, a science tests and explains natural phenomena. I'll draw from all walks of life to display the good it's done for human kind: - Personal Finance: How do we know diversifying your investments gives you the optimal risk-reward in a given timeline? - Public Policy: Why do governments prevent monopolies from forming? - Jobs: Why do you have a specific job title instead of being a Jack of All Trades? - (American) Football: Why do most coaches punt on fourth down, even when they shouldn't? (risk aversion) - Population: Why has the birth rate been declining? Second, your analogies make little sense. The architect doesn't build the house, the construction crew does. Regardless, each specialty (hmm, that specialization again?) plays an important role in building a house. Blah...

deleted 13y ago
[deleted]
atmosx 13y ago
> Personal Finance: How do we know diversifying your investments gives you the optimal risk-reward in a given timeline? You mean that you have to study in order to to come with a straight answer right? Study economics OR do the math? Public policy: I don't know why monopolies should not be formed. But I guess you do, right? :-) Care to explain? > Jobs: Why do you have a specific job title instead of being a Jack of All Trades? You probably see a connection among Jack-of-All-Trades and economics as a scientific field, which I do not. Enlighten moi please. > Population: Why has the birth rate been declining? Because they apply policies based on things that politicians and other ignorants (economists) think they understand, when the examples we have at hand shows they clearly DO NOT understand the how and the why. All they offer is a translation after their policy had failed miserably for the n-th time. > Second, your analogies make little sense. The architect doesn't build the house, the construction crew does. Regardless, each specialty (hmm, that specialization again?) plays an important role in building a house. Really? Have you take a closer look at Wall Street to see how many % of the population working there (financial sector) studied economics and not physics or some other math-intensive science? How many doctors do you know without a degree in medicine but with a degree in physics?