Thread: Modern Economics

Originally Posted by nonpareil

You do realise that repeating yourself again and again won't make what you say true?

Dittos

............

It's a proven fact that when people tell the same lies over and over again they begin to believe that it is true. And when people hear the same lies over and over again they believe it to be true. The truth is often what we choose to believe that it is, so yes, in some cases, repeating something over and over may make it true.

Originally Posted by RandomVariable

As a math major, I find the abundant reliance on mathematical models by modern economists absurd. To me it seems that economists suffer from math/physics envy (in that a lot of the mathematical models they use are borrowed from physics with minor adjustments.)

The problem with trying to model a complex system such as the economy - which is comprised of hundreds of millions of participants, all with a mind of their own - is the enormous nonlinearities involved. The nonlinearity translates to significant sensitivity of the output of a certain model to initial inputs. In other words, a small error in the input leads to the rapid evolution towards massively erroneous results. Or in the language of differential equations & dynamical systems, there are huge bifurcations.

The adverse effect of this can generally be minimized when an individual, or even a company, attempts to make decisions based on quantitative methods, because their inputs represent data based on individuals with which they are more intimately related (themselves, their clients, or just a smaller subset of the entire population in general.) What I find troubling is that modern economists are responsible for formulating our economic policy, and they utilize the aforementioned methods by applying them to the entire population in order to maximize overall utility - ie "the greater good."

Empirically, modern economics certainly does not have a very good track record. Perhaps it's time for an evaluation of the field as a whole - a field that has become a joke, to be quite honest.

I agree with your post . modern economics can work all it needs is common sense.

Originally Posted by Jeezy

Unless you can think of a better method of representing economic exchange than the symbolic logic of...y'know...

...numbers...

...then I really don't see the point of this argument.

You might as well say that no humanistic discipline or social science should use mathematical models for any reason because of the "nonlinearities involved."

The logic of "numbers are controlled by the people using them.

The math of Modern Economics must be applied by humans, and humans make mistakes.

For 12 years this kind of economics has been applied , and for 12 years the economy of America has gone down, in debt.

Perhaps it is time the Modern Economics of the day try something different?

Or we could "STAY THE COURSE", or wait till "JUST AROUND THE CORNER" gets here or wait for "THE BIG CHANGE" or shout "YES WE CAN " really loud , but so far none of these have worked.

Originally Posted by presluc

I agree with your post . modern economics can work all it needs is common sense.

I think the reason modern economics doesn't appear to work is the emo factor. Greed and avarice are part of the equation that math doesn't factor in.

Originally Posted by grip

I think the reason modern economics doesn't appear to work is the emo factor. Greed and avarice are part of the equation that math doesn't factor in.

Nor does common sense.

I'm no master of economics or math but I like to keep things simple and I think I have common sense.

See if I am wrong in my common sense economics here are the numbers.

If Americans have more jobs, people have more paychecks.

1 paycheck at say $2.00 above minimum wage= more taxes= more purchases=money circulation= paying on the national debt.
Multiply that by 6 million some where in there you have a + adding

No paycheck= unemployment from the government or state= more food stamps=more welfare=less purchases= no taxes=no paying off the debt =less money circulation.
Multiply that by 6 million some where in there you have a - subtracting

Originally Posted by presluc

Nor does common sense.

I'm no master of economics or math but I like to keep things simple and I think I have common sense.

See if I am wrong in my common sense economics here are the numbers.

If Americans have more jobs, people have more paychecks.

1 paycheck at say $2.00 above minimum wage= more taxes= more purchases=money circulation= paying on the national debt.
Multiply that by 6 million some where in there you have a + adding

No paycheck= unemployment from the government or state= more food stamps=more welfare=less purchases= no taxes=no paying off the debt =less money circulation.
Multiply that by 6 million some where in there you have a - subtracting

I agree and there's no apparent source of new jobs coming anytime soon. But there is going to be an increase of unemployed adults coming into the work scene.

Originally Posted by grip

I agree and there's no apparent source of new jobs coming anytime soon. But there is going to be an increase of unemployed adults coming into the work scene.

Well, so far corporations have cut unskilled labor "jobs" in half maybe more.

The bad news is college grads hitting the work force in their area of labor hit an unemployment of about 40% give or take according to a Yahoo news feed..

The real bad news is the way I see it "I could be wrong and hope I am" is that as of today this is how America stands,
America depends on the following for other countries for,
Energy; at least 65 or 75%
Labor; at least 60%
Materials through imports 75%
Communication; 60 to 75%

Of course the garment ind is well ?

Originally Posted by RandomVariable

As a math major, I find the abundant reliance on mathematical models by modern economists absurd. To me it seems that economists suffer from math/physics envy (in that a lot of the mathematical models they use are borrowed from physics with minor adjustments.)

The problem with trying to model a complex system such as the economy - which is comprised of hundreds of millions of participants, all with a mind of their own - is the enormous nonlinearities involved. The nonlinearity translates to significant sensitivity of the output of a certain model to initial inputs. In other words, a small error in the input leads to the rapid evolution towards massively erroneous results. Or in the language of differential equations & dynamical systems, there are huge bifurcations.

I agree wholeheartedly- the idea that you can "forecast" future profits based on quantities demanded in the past is absurd, simply because of how attitudes of consumers are constantly changing. I feel like the only reason any of these multi-national conglomerates still exist today is because of their sheer market dominance-the fact that each market is dominated by a few, top firms-such as Wal-Mart, McDonalds, Exxon-Mobile, etc. etc...

Random Variable, 129 posts are too much to scan but I suspect this is one of those rare discussion threads where all (or almost all) participants concur with each other.

Does anyone believe otherwise?

Respectfully, Supposn