|
|
|
|
|
|
by axplusb
3847 days ago
|
|
|
As an econ PhD dropout, I never quite understood why such an emphasis was made on physics-lookalike models. I was always more encouraged to come up with a bunch of equations that would mimic some phenomenon, than dig around and understand this phenomenon in more depth. A few arguments that I can agree with though: - Models are a compact formulation of complex theories. I remember a professor writing a dozen equations and claiming he just taught us Marx's Capital. In retrospect I think that's pretty funny, and quite telling of the superficiality that is rampant in the profession. But still that might have been a great executive summary (I still haven't read the book). Another example is Piketty's "r > g" that really is a lot of food for thought. - Models can lead to actionable insight. I think there are people in Central Banks and Economics departments of governments who rely quite heavily on some models to forecast GDP, unemployment etc. But this comes with a huge caveat: it's often easy to tweak a model to make it describe pretty much the opposite phenomenon of the one intended. So the real benefits of that kind of academia were and still are pretty unclear to me. I believe some academics were hiding their lack of deep understanding of economic matters behind a fog of math. Even Blanchard (former chief economist at the IMF) admitted to something along those lines in the wake the 2008 crisis. |
|
|
Further, it enables others who wish to criticize it to easily derive predictions and show that those predictions fail to match reality, while making it impossible for you to say "that isn't what I meant". If the math says it, that's what the model predicts.
Vague verbal reasoning just involves a lot of time wasting - "your model seems to show this, I think" -> "no that's totally not what I meant, you don't understand" -> etc.