[Draiken]

Not OP but I have not. As an ignorant, I have a burning question (for real, not being facetious): isn't it bullshit?

Judging by the outcomes of the field and the absurd world we live in today with insane boom/bust cycles every few years, sky-high levels of wealth accumulation, inflation out of control world-wide, one cannot wonder how nobody seems to understand it.

From the outside, it looks like either they are producing incorrect/incomplete theories that simply don't work in the real world, or it's all so theoretical that it never really translates into people's lives.

Or, alternatively, the system is working exactly as intended and the goal was always to maximize for a few individuals and not society in the first place.

[playday]

There’s two main approaches to economics that aren’t bullshit: empiricism and praxeology. With empiricism, you conduct some sort of experiment (or identify a natural experiment) than can verify falsifiable predictions. With praxeology, you work from first principles regarding rational agents. Both mechanisms result in insights that “work” meaning institutions can use these insights to modify their policies. An easy to understand example is the application of the economics to MMORPG game currencies. But these more generally are applied by finance and government departments everywhere. There is a degree of bullshit that enters when there’s a political dynamic, such as with unemployment rate stats or gdp growth stats.

[svnt]

These systems are something but not really representative human economics.

Empiricism is vulnerable to the changing awareness of the participants: if you discover a reliable principle it will be manipulated until it is learned. Once it is learned it is no longer reliable.

Rational agents are typically poor proxies for human behavior, and the more of them you have the worse the narrative to make it even seem that they could plausible be the way humans behave.

[Kratacoa]

I'd recommend Dani Rodrik's Economics Rules that gives you a view of how economists work, what are their limitations and what is their skillset.

I'll try to answer your question through the lens of that book: the models that economists develop work under the models assumptions, and therefore they quite rarely fit well extremely complex phenomena like inflation; in general, economists treat the problems they face on a case per case basis by comparing different models outcomes', looking at the historical data, discussing the merits of the respective arguments for one or the other policy, and obviously depending on the specific goals you find more desirable (equality vs growth for example). The way the economy is ran is not necessarily representative of the economists consensus, or even that of the economists that are employed by the biggest policymakers, as the policies chosen might be the ones deemed more politically feasible, or more desirable for the particular politician's interests, and not the ones that are economically most sound and well-founded.

By the way, a topic I've been always fascinated by but never inquired further is that of social choice, wherein the economists analyse the incentives of classes such as that of policymakers.

[MoreSEMI]

Inflation is a really bad example of a failure of economic theory. First, just because the field might understand how to avoid inflation, doesn’t mean that is actually implemented. And secondly, until recently inflation as measured by cpi has been low to zero for the last decade. I think a sense of proportion needs to be exercised here.

[boppo1]

Lots of economic theories are actually pretty strong. Your gripe ought to be with the FOMC abusing Keynes right in the very center of our whole system. Please see my recent comments for an explanation.