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The other day I was wondering why we, as a population, keep arguing about what economic model would work the best? Don't we have computers that can run simulati

by WWKong 13y ago

The other day I was wondering why we, as a population, keep arguing about what economic model would work the best? Don't we have computers that can run simulations and provide answers? Inputs could be population size, current wealth distribution, socialist/capitalist/hybrid, tax rate, cultural influence etc. We don't have to be accurate, just directionally correct. Why do we keep playing this game in the real world? Is it because we don't yet have information to model the engine?

marcosdumay 13y ago
> Don't we have computers that can run simulations and provide answers? It's the old "garbage in / garbage out" problem. If you don't have a good model, you can only simulate a bad one. Also: > We don't have to be accurate, just directionally correct. If the model is not accurate, you can't ever falsify it, thus you can't improve it. That's one of the biggest flaws of current economics, their models are not accurate.
- Mikeb85 13y ago
  > That's one of the biggest flaws of current economics, their models are not accurate. Some are more accurate than others. This isn't a flaw BTW, rather an indicator of how complex the problem really is.
Tycho 13y ago
How do you model free will?
JackFr 13y ago
It is not just that we don't have the information -- it is likely that it is _impossible to have the information_. The economy is not a machine, it is organic and self-modifying. While there are reasonable arguments for free markets which are pure philosophy, from a pragmatic perspective free markets are good, because the the price is probably the most accurate and efficient information channel available to producers and consumers.
mcguire 13y ago
Simulations are a great way of telling yourself what you already believe to be true. Since you build your assumptions into the inputs and into the simulation, you really need significant external validation.
dragonwriter 13y ago
> The other day I was wondering why we, as a population, keep arguing about what economic model would work the best? Don't we have computers that can run simulations and provide answers? (1) Because "works the best" is a question of subjective value, not one of objective fact, so it cannot be answered factually, and (2) Because while computers can run simulations, that doesn't even help answer factual questions until you have both a reliable model to use in the simulation that covers the specific area of interest and a complete description of the model-relevant facts from the economic context in which the proposals is to be evaluated. Good luck with that when it comes to any significant question of economic policy.
Mikeb85 13y ago
> Don't we have computers that can run simulations and provide answers? Inputs could be population size, current wealth distribution, socialist/capitalist/hybrid, tax rate, cultural influence etc. We don't have to be accurate, just directionally correct. Why do we keep playing this game in the real world? Is it because we don't yet have information to model the engine? If you can figure out a good simulation model there will be someone willing to let you run it on a TOP500 supercomputer. People already run these kinds of simulations, but the complexity is beyond the capability of today's computers. Not to mention all the random variables - wars, droughts, earthquakes, political change, technological improvements, etc..., which all affect economies. And of course the information to model it is another problem, because much of it will have to be inferred - what's the probability of a war? What probable effect will technological advances have? Hows the weather going to be this summer? Will there be ice storms this winter? People wonder why so many assumptions are made in economics - it's because some of the variables are simply too unpredictable.

by WWKong 13y ago

marcosdumay 13y ago

> Don't we have computers that can run simulations and provide answers? It's the old "garbage in / garbage out" problem. If you don't have a good model, you can only simulate a bad one. Also: > We don't have to be accurate, just directionally correct. If the model is not accurate, you can't ever falsify it, thus you can't improve it. That's one of the biggest flaws of current economics, their models are not accurate.

Mikeb85 13y ago
> That's one of the biggest flaws of current economics, their models are not accurate. Some are more accurate than others. This isn't a flaw BTW, rather an indicator of how complex the problem really is.

Tycho 13y ago

How do you model free will?

JackFr 13y ago

It is not just that we don't have the information -- it is likely that it is _impossible to have the information_. The economy is not a machine, it is organic and self-modifying. While there are reasonable arguments for free markets which are pure philosophy, from a pragmatic perspective free markets are good, because the the price is probably the most accurate and efficient information channel available to producers and consumers.

mcguire 13y ago

Simulations are a great way of telling yourself what you already believe to be true. Since you build your assumptions into the inputs and into the simulation, you really need significant external validation.

dragonwriter 13y ago

> The other day I was wondering why we, as a population, keep arguing about what economic model would work the best? Don't we have computers that can run simulations and provide answers? (1) Because "works the best" is a question of subjective value, not one of objective fact, so it cannot be answered factually, and (2) Because while computers can run simulations, that doesn't even help answer factual questions until you have both a reliable model to use in the simulation that covers the specific area of interest and a complete description of the model-relevant facts from the economic context in which the proposals is to be evaluated. Good luck with that when it comes to any significant question of economic policy.

Mikeb85 13y ago

> Don't we have computers that can run simulations and provide answers? Inputs could be population size, current wealth distribution, socialist/capitalist/hybrid, tax rate, cultural influence etc. We don't have to be accurate, just directionally correct. Why do we keep playing this game in the real world? Is it because we don't yet have information to model the engine? If you can figure out a good simulation model there will be someone willing to let you run it on a TOP500 supercomputer. People already run these kinds of simulations, but the complexity is beyond the capability of today's computers. Not to mention all the random variables - wars, droughts, earthquakes, political change, technological improvements, etc..., which all affect economies. And of course the information to model it is another problem, because much of it will have to be inferred - what's the probability of a war? What probable effect will technological advances have? Hows the weather going to be this summer? Will there be ice storms this winter? People wonder why so many assumptions are made in economics - it's because some of the variables are simply too unpredictable.