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Re:How does the economy work? A new Fed paper suggests nobod... by lottin on Sunday October 03, 2021 @09:24AM (#28736990)
Economists are not trying to predict anything. Some economists do make predictions, but economics is not about making predictions.
Re:How does the economy work? A new Fed paper suggests nobod... by codeulike on Sunday October 03, 2021 @02:38PM (#28739462)
Of course it's about prediction. There's no point spending time trying to understand something unless you're going to use that understanding to try and anticipate the future.
Re:How does the economy work? A new Fed paper suggests nobod... by edflsafoiewq on Sunday October 03, 2021 @10:19AM (#28737334)
What is it about then?
Re:How does the economy work? A new Fed paper suggests nobod... by missedthecue on Sunday October 03, 2021 @02:11PM (#28739189)
"To most people, economics is a dull science full of statistics and jargon, mainly concerned with money and designed to answer a narrow (but important) set of questions. To economists, economics is a powerful tool for understanding why armies run away, voters are ignorant, and divorce rates rise, as well as solving practical problems such as how not to get mugged. Its theme is not money but reason- the implications, especially the nonobvious implications, of the fact that humans act rationally. Or to put it more formally:

Economics is that way of understanding behavior that starts from the assumption that individuals have objectives and tend to choose the correct way to achieve them."

Excerpt from Hidden Order, a book which explains economic concepts to non-economists.

Re:How does the economy work? A new Fed paper suggests nobod... by BoiledCabbage on Sunday October 03, 2021 @02:38PM (#28739459)
Explanations are useless if they can't make predictions.

Non-falsifiable explanation aren't worth the paper they're printed on.

While it's a nice quote above, I suspect many economists would disagree with that reduction of their field to being only backwards looking.

Re:How does the economy work? A new Fed paper suggests nobod... by lottin on Sunday October 03, 2021 @04:51PM (#28740404)
> Explanations are useless if they can't make predictions.

Nonsense. Most sciences aren't about making predictions. Another example is linguistics. Linguists have reconstructed languages long extinct and figured out how they evolved into modern languages. Yet, they can't predict how these languages will evolve in the future. Does this mean these explanations useless? No. Why should they be useless? They may not be of interest to you, but that doesn't mean they're useless.

Re:How does the economy work? A new Fed paper suggests nobod... by pbhjpbhj on Sunday October 03, 2021 @06:07PM (#28740914)
I disagree with you, strongly, but I'll just note this -- you appear to espouse the view (in you last sentence) that utility is the only value something can have. There are many things to know that lack utility but still hold value somehow. Useless does not mean worthless; but science really is about prediction.
Re:How does the economy work? A new Fed paper suggests nobod... by lottin on Sunday October 03, 2021 @06:32PM (#28741099)
I don't know what you're on about. It's been over a century, since economists adopted a subjective theory of value, according to which value is that—subjective. As such, we don't try to explain it, because it doesn't matter. You may think something is valuable because it's useful, or because some other reason. It makes no difference, and we don't care. All we care about is how much you are willing to pay for it. This tells us everything we need to know.
Re:How does the economy work? A new Fed paper suggests nobod... by sudosysgen on Sunday October 03, 2021 @07:09PM (#28741339)
That's pretty arguable. There are many things that I find useful that I wouldn't pay for.
Re:How does the economy work? A new Fed paper suggests nobod... by neilknowsbest on Sunday October 03, 2021 @11:02AM (#28737729)
“The curious task of economics is to demonstrate to men how little they understand about what they imagine they can design” -- Hayek
Re:How does the economy work? A new Fed paper suggests nobod... by andresgaitan on Sunday October 03, 2021 @04:43PM (#28740364)
Excellent quote
Re:How does the economy work? A new Fed paper suggests nobod... by lottin on Sunday October 03, 2021 @11:30AM (#28737951)
Same as any scientific endeavour, studying a particular phenomenon, which in the case of economics is the production, distribution and consumption of goods and services.
Re:How does the economy work? A new Fed paper suggests nobod... by edflsafoiewq on Sunday October 03, 2021 @11:46AM (#28738054)
It is in the ability to predict novel situations that understanding is tested.
Re:How does the economy work? A new Fed paper suggests nobod... by lottin on Sunday October 03, 2021 @02:38PM (#28739457)
Not really. For example, a model can accurately explain variable X as a function of Z, Y but if Z and Y are exogenous variables, i.e. outside of the scope of the model, then the future behaviour of X cannot be known, despite the fact that we may understand very well the mechanisms by which Z and Y cause X.
Re:How does the economy work? A new Fed paper suggests nobod... by mcguire on Sunday October 03, 2021 @03:42PM (#28739924)
Which is why economics is not a science.
Re:How does the economy work? A new Fed paper suggests nobod... by lottin on Sunday October 03, 2021 @04:37PM (#28740328)
Science is the application of the scientific method, and mainstream economics fully adheres to the scientific method.

There are heterodox schools, such as the Austrian school, that reject the scientific method, and these are definitely not scientific.

Re:How does the economy work? A new Fed paper suggests nobod... by rsj_hn on Sunday October 03, 2021 @05:00PM (#28740462)
Economics is a social science and as such, is not really amenable to the methods of falsification or experimentation that work well in physics or chemistry. In short, it's not really a science. That doesn't mean you shouldn't try to do your best to be logical and factual as much as possible, but at the end of the day you will produce mostly unfalsifiable theorizing.

Really you need more modest goals, for example to at least try to approach the subject objectively rather than via sentimental moralizing. Even that is a massive effort. Imagine a physicist decrying how "wrong" it is for gravity to be weaker than the other forces. You would laugh at such a person and immediately classify them as not a real physicist. So you can use that as a filter to exclude much of heterodox economics and economists as a start. That's the battle being waged -- objectivity -- not falsifiability.

Re:How does the economy work? A new Fed paper suggests nobod... by lottin on Sunday October 03, 2021 @05:14PM (#28740561)
If social sciences are not sciences, what are they? Please, explain. Also I'd like to know how falsifiability applies to the big bang theory. Thank you!
Re:How does the economy work? A new Fed paper suggests nobod... by rsj_hn on Sunday October 03, 2021 @07:27PM (#28741452)
A good rule of thumb is that fields which style themselves by adding "science" to their name are not sciences. An economist friend of mine told me that, and it stuck. In fact if you are a physicist you don't go around insisting to people that you are a scientist and what you do is science and if they disagree with you they are anti-science. You just say "hey, this is physics".

So far, this rule of thumb has not let me down.

FYI, you may want to read Feynman's lecture on Cargo Cult Science -- that is avoiding the trappings of science while not actually having the rigour and intellectual honesty of true science. A good link is here: https://calteches.library.caltech.edu/51/2/CargoCult.htm

I enjoy economics, political science, anthropology, sociology, etc, but they are most definately not science.

Re:How does the economy work? A new Fed paper suggests nobod... by lottin on Monday October 04, 2021 @02:56AM (#28743881)
> good rule of thumb is that fields which style themselves by adding "science" to their name are not sciences

And this is your whole argument?

Isn't physics a "natural science" and therefore not science according your rule of thumb.

This discussion is stupid. If you want to argue that social sciences are not science, all you have to do is show that social sciences don't follow the scientific methodology. If you can't show that, you should shut up and stop wasting everybody's time.

Re:How does the economy work? A new Fed paper suggests nobod... by PeterisP on Sunday October 03, 2021 @06:07PM (#28740923)
Falsifiability applies to the big bang theory because the big bang theory is not about the general concept of "a" big bang, but about specific models of how exactly the events very shortly after the big bang happened, which make testable predictions about all the consequences of those very early events - the distribution of matter and energy in the universe, properties of cosmic microwave background, etc; such models can predict observations/measurements (of ancients events) that we have not yet made, and be falsified if those observations disagree with the model predictions.
Re:How does the economy work? A new Fed paper suggests nobod... by rsj_hn on Sunday October 03, 2021 @10:41PM (#28742443)
Falsifiability is feasible to some degree -- e.g. in history you can hypothesize that a civilization had copper and then look for evidence of copper artifacts.

But in the physical sciences you have well-formed mathematical models that make very specific and precise predictions and can be tested to a high degree of accuracy. That specificity allows you to set threshholds like 5 sigma for acceptance of a result as being verified.

"Did we find copper" is a bit different, and thus there is a fuzziness in history that you don't have in physics or chemistry, which is why we don't view history as being a science even though it benefits from use of the scientific method. Everything -- cooking, dating, gardening -- can make use of the scientific method, but at issue here is the trust that the public places in accepted findings of science and such trust is not justified in the fuzzier fields. People need to add big error bars in their heads when listening to results from social sciences and much smaller error bars when listening to results from physics.

Re:How does the economy work? A new Fed paper suggests nobod... by jokethrowaway on Sunday October 03, 2021 @06:25PM (#28741038)
You can't really prove or disprove whether an economic theory is a good choice or not for a country at a specific time.

How are you going to measure the outcomes and for how long will you measure them?

The problem with economics is how politicised this field is and how the best theory ends up being what's best for governments and politicians. Is mainstream economics what's more convenient for the 1% or what's best for the world?

We will never know what the economy would be if we weren't so Keysian. Maybe we wouldn't have a crisis every 10 years.

Re:How does the economy work? A new Fed paper suggests nobod... by mcguire on Sunday October 03, 2021 @06:49PM (#28741208)
Your model of X, Y, and Z cannot make predictions. How do you validate it?
Re:How does the economy work? A new Fed paper suggests nobod... by lottin on Monday October 04, 2021 @01:48AM (#28743476)
Generally speaking, statistical models are validated by measuring how well/bad they fit the data, for example, studying the residuals and performing statistical tests. Predictive power can be estimated by using the model to predict known outcomes (using out-of-sample data).
Re:How does the economy work? A new Fed paper suggests nobod... by tacostakohashi on Sunday October 03, 2021 @03:42PM (#28739926)
It's mainly about allocating resources.