After reading this, I am more convinced than ever that macroeconomics has no bloody idea what the hell is going on. We have a bunch of fancy models and then argue over whose model is the least broken.
Macroeconomics is almost entirely faith-based and people generally just believe the version that meshes with their overall political view.
It is pretty easy to see this just watching the back and forth that occurs after someone (whether a random internet forum poster, or a Nobel Prize winner in economics) makes some claim about how policy should be modified (or not) to meet an economic goal. Approximately 50% of people (again, both including random internet people AND those who are highly educated in the field) will nod and the other 50% will be convinced the person who made the claim has no idea how economics works.
While this seems ludicrous when you compare it to "hard" sciences like physics or such I'm not sure it is a repairable situation, because outcomes of different macroeconomic models and policies rely heavily on the perception of reality of people, which is frighteningly close to a random number generator at scale.
That's not entirely true. If you look at something like the Economics Experts Panel: http://www.igmchicago.org/igm-economic-experts-panel, some issues are divisive, some have broad consensus and most are in between.
We tend to only hear about the divisive ones though because those are the only ones that actually make news.
Comments
After reading this, I am more convinced than ever that macroeconomics has no bloody idea what the hell is going on. We have a bunch of fancy models and then argue over whose model is the least broken.
Yeah.
Macroeconomics is almost entirely faith-based and people generally just believe the version that meshes with their overall political view.
It is pretty easy to see this just watching the back and forth that occurs after someone (whether a random internet forum poster, or a Nobel Prize winner in economics) makes some claim about how policy should be modified (or not) to meet an economic goal. Approximately 50% of people (again, both including random internet people AND those who are highly educated in the field) will nod and the other 50% will be convinced the person who made the claim has no idea how economics works.
While this seems ludicrous when you compare it to "hard" sciences like physics or such I'm not sure it is a repairable situation, because outcomes of different macroeconomic models and policies rely heavily on the perception of reality of people, which is frighteningly close to a random number generator at scale.
That's not entirely true. If you look at something like the Economics Experts Panel: http://www.igmchicago.org/igm-economic-experts-panel, some issues are divisive, some have broad consensus and most are in between.
We tend to only hear about the divisive ones though because those are the only ones that actually make news.