Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

Re:Why Were Economists as a Group as Useless Over 2010-2014 ... by FullMtlAlcoholc on Monday April 03, 2017 @08:14PM (#14028433)

One could scarcely call the field of Economics a science though.

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Re:Why Were Economists as a Group as Useless Over 2010-2014 ... by thinkling on Monday April 03, 2017 @08:59PM (#14028679)

Since politicians don't observe the consensus in a more rigorous science (climate), there's even less reason to think they'll observe it in economics.

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Re:Why Were Economists as a Group as Useless Over 2010-2014 ... by FullMtlAlcoholc on Monday April 03, 2017 @09:08PM (#14028726)

My point exactly. Although I think UBI is a highly imperfect solution to the threat automation poses towards the livelihoods of those replaced, there isn't anything better on the table. I fear that our government won't take this seriously and reject UBI simply on moral grounds even if all the research and evidence pointed towards it being the best policy option.

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Re:Why Were Economists as a Group as Useless Over 2010-2014 ... by collyw on Tuesday April 04, 2017 @09:23AM (#14032288)

Politicians don't like evidence. Look what happened to David Nutt in the UK.

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Re:Why Were Economists as a Group as Useless Over 2010-2014 ... by mathieutd on Monday April 03, 2017 @09:18PM (#14028768)

Why? They formulate theories and test them against data to understand how the world works. Is that not the definition of science?

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Re:Why Were Economists as a Group as Useless Over 2010-2014 ... by CuriouslyC on Monday April 03, 2017 @10:30PM (#14029061)

All economic systems are to some degree adaptive and nonlinear, because people are adaptive and nonlinear. Economists generally create static linear models of these systems. Additionally, economists tend to assume Gaussian errors with diagonal covariance matrices because the math tends to blow up otherwise. Non-gaussian errors are fairly common unless your data set is a bunch of means (thus the ubiquity of "outliers"). Beyond that, economists assume "rational" agents that maximize utility, but this is a fairly poor model of human behavior.

Economists aren't uncovering an underlying truth, they're basically building toy models. These toy models might approximate economic systems in a narrow range of controlled circumstances, but things rapidly deteriorate outside that range. The problem is that people assume the models reflect reality, and make bets based on that assumption.

It would be nice if economists focused on fully Bayesian models with Gaussian process priors and long tailed (ideally Levy alpha-stable with a low alpha bias) likelihood functions. At least then the uncertainty of their models would be absolutely clear, and black swan type events would be partially factored in.

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Re:Why Were Economists as a Group as Useless Over 2010-2014 ... by gone35 on Tuesday April 04, 2017 @12:56AM (#14029582)

[...] and test them against data

No, in fact they don't. It's hard to believe, I know.

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Re:Why Were Economists as a Group as Useless Over 2010-2014 ... by FullMtlAlcoholc on Monday April 03, 2017 @09:53PM (#14028924)

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Re:Why Were Economists as a Group as Useless Over 2010-2014 ... by billions on Monday April 03, 2017 @10:20PM (#14029023)

Science is subject to interpretation on a spectrum of levels. How accurately can biology predict when a cell will split? Perhaps economic supply and demand is statistically predictable in the same fashion.

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