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Re:A New Way to Learn Economics by JumpCrisscross on Tuesday September 12, 2017 @03:25AM (#15225441)
> Leontief matrices

These are commonly called IO models in econometrics (for input-output). There are a number of successful IO models. Characterising these as "competitors" to supply-demand curve drawing is silly since they share common themes and complement each other. IO models need lots of data and underperform in situations where the market computes the table for you, i.e. where prices are clear, e.g. for commodities or liquid financial assets.

Re:A New Way to Learn Economics by js8 on Tuesday September 12, 2017 @04:05AM (#15225603)
> IO models need lots of data

To draw supply and demand curves to just find the equilibrium also requires quite a lot of data. And if you aggregate, then it's not even clear what these curves are and what is the equilibrium.

> where the market computes the table for you

I am not sure what you mean by that. How is supply-demand model better? What it gives you in those situations?

Also, I should add: Blatt's IO model (if you want to call it that) is not an econometric (meaning statistical) one. I am not familiar with IO econometric models, so I cannot say how it is different. And it's kinda underdeveloped, too, unfortunately though understandably.

Re:A New Way to Learn Economics by JumpCrisscross on Tuesday September 12, 2017 @12:05PM (#15228430)
> I am not sure what you mean by that. How is supply-demand model better? What it gives you in those situations?

It yields better predictions with fewer inputs. For simple calculations of optimal pricing or optimal production quantities given input costs, a simple table of volume versus price beats a matrix. IO models become interesting when observing entire industries. (That is why the DoJ uses the HH metric [1], an IO-derived metric, to measure competitiveness.) But they're macroeconomic, not microeconomic, models. Macro has a worse track record than micro, which starts with simple regressions of volume and price that we call supply and demand.

These kinds of matrix models are deeply embedded into the IMF's approach, by the way. Many are critical of the IMF's over reliance on such difficult-to-intuit models.

[1] https://en.m.wikipedia.org/wiki/Herfindahl_index

Re:A New Way to Learn Economics by js8 on Tuesday September 12, 2017 @12:33PM (#15228742)
Again, I think you're talking about statistical model, which I don't object to. I object to supply-demand model as a phenomenological model, as taught in the economics textbooks. What they are doing is not regression.
Re:A New Way to Learn Economics by JumpCrisscross on Tuesday September 12, 2017 @01:34PM (#15229356)
Basic rules like "if you decrease supply the price will go up" are true in more cases than they aren't. I agree, however, that entry-level students tend to overfit their models. If they never receive later training, they go into the world with a faulty view. Those same people then find those models failing in places we've known, for decades, they fail (in some cases, in a predictable way) and then come back to blame the models.