tag:blogger.com,1999:blog-3621026.post3173553458225959177..comments2024-03-29T06:05:04.162+01:00Comments on Robert's Stochastic thoughts: The usual comment on Wren-LewisRoberthttp://www.blogger.com/profile/14455788499385673507noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-3621026.post-42367571151528647472014-10-20T18:25:10.199+02:002014-10-20T18:25:10.199+02:00Fortunately for the world no one cares about your ...Fortunately for the world no one cares about your opinion.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3621026.post-46952511906156121132014-09-27T21:07:19.414+02:002014-09-27T21:07:19.414+02:00I tend to think that there is a strong tendency in...I tend to think that there is a strong tendency in economics and business schools to align themselves with the wealthy. It's something that was prevalent in the 19th Century and the Great Depression was the break in that alignment. However, it was always a strong feeling to suggest wealth must have been earned. Also, the simplicity of a Newtonian type clockwork of a free market without government is a seductively neat way of viewing the world. And so, any deviation must be the fault of an interventionist government.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3621026.post-24531244138362774642014-09-27T02:16:05.740+02:002014-09-27T02:16:05.740+02:00I note the word "unanswered" in the seco...I note the word "unanswered" in the second bit you quote. Those questions are<br />1) how do people really form exectations ?<br />and<br />2) what's going to happen ?<br /><br />In contrast, I think some questions have been answered.<br /><br />I think they include<br />1) is the Permanent income Hypothesis true ? <br />As originally stated it is false. To argue that it should be considered a model not a hypothesis is to argue that Milton Friedman was totally wrong. He not I called it a hypothesis<br /><br />2) is an intertemporal optimizing consumer a good place to start when modelling aggregate consumption and savings ? I think the answer is clearly no. It is widely agreed that it isn't a good place to end, but I think the approach contributes no useful insights at all. I have challenged Wren-Lewis to describe one such useful insight. His response was "very thin gruel." -- P Krugman <br />and didn't address aggregate consumption at all.<br /><br />3) Is a model of shareholder value maximization considering installation costs a good place to start when modelling investment ? Here I note that it has been abandoned in the state of the art DSGE models. The accelerator fits the data well.<br /><br />well things like that.<br /><br />The kind of questions we can answer are <br />1) is this hypothesis rejected by the data<br />2) Is this model a useful approximation to the data<br />3) Do more recent models outperform 40 year old models ?<br /><br />The question which is not answered is "OK so if the answers to are no, no, and no, then what are we supposed to do to understand macroecomics and achieve good macroeconomic outcomes.<br /><br />I think your comment proves that you can't grasp the possibility that some questions have been answered and some questions have not been answered. I see no other explanation for your chose to ignore my qualifier " unanswered" <br />Roberthttps://www.blogger.com/profile/14455788499385673507noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-58476261085994458732014-09-26T13:56:34.094+02:002014-09-26T13:56:34.094+02:00Wow!
A devastating question:
What could the data d...Wow!<br />A devastating question:<br />What could the data do which they have failed to do in the past 40 years ?<br /><br />To have followed by this:<br />"the unanswered questions are too hard (I fear unanswerable)."<br /><br />Oh well.<br /><br />I don't think the ananswered questions are unanswerable, I think they are the wrong questions.<br /><br />No one asks an architect to predict what his new building will look like by surveying (even with great mathematical rigor) all extant buildings. We ask architects to build us the building we want exploiting the knowledge that was gained in building all past buildings.<br /><br />Economics would be far less dismal if it dreamed about how to make the economy we like rather drearily examining what has been as evidence of what must be.<br /><br />why so dismal?Danhttps://www.blogger.com/profile/15136541075745913165noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-57046952173801983292014-09-25T23:48:55.963+02:002014-09-25T23:48:55.963+02:00I think the point he's trying to make is that ...I think the point he's trying to make is that your three questions sound like word salad to him.Larryhttps://www.blogger.com/profile/04760217129884156679noreply@blogger.comtag:blogger.com,1999:blog-3621026.post-24519995622109022572014-09-25T10:18:55.793+02:002014-09-25T10:18:55.793+02:00I tend to make the same comment in these discussio...I tend to make the same comment in these discussion too (my one about the consequences of focusing on exogenous shocks as the source of fluctuations and neglecting models endogenous crises.) <br /><br />But I never get any traction. I am always hoping Simon or someone will pat me on the head and say, yes you're right, that is important. <br /><br />I am perplexed. It seems to me that it *is* important - most critics of mainstream economics do seem to want it to predict crises, or at least have something to say about how they come about and how to prevent them, and it seems obvious to me that mainstream macro just hasn't been in that game. <br /><br />But in all the very many discussions of the failings of mainstream macro I read, this point never seems to come up and it's all about the shortcomings of intertemporal optimization, representative agents. Now I suppose they might expect the reader to make the connection for themselves that these approaches make it difficult to model endogenous crises and such like, but why not go directly to the point? <br /><br />Am I missing something? Luis Enriquehttps://www.blogger.com/profile/09373244720653497312noreply@blogger.com