Here's Bryan Caplan writing about math in economics.
Seems very wrong to me. I wonder what the quickest refutation is that would make sense to most practicing economists.
https://www.betonit.ai/p/economath_failshtml
Seems very wrong to me. I wonder what the quickest refutation is that would make sense to most practicing economists.
https://www.betonit.ai/p/economath_failshtml
Comments
And does it make similar assurance for the receiving side?
Consider information problem: Production requires knowledge and time; people can acquire knowledge or ask for directions. Problems don't have labels.
Solution: workers specialize in production or problem solving, form knowledge hierarchy, with management by exception.
There's a story of a junior theorist setting up the model in a talk, stopping, and saying, "This would be the moment to tell me the results, if they're obvious."
…
…Ethan.
There is a name attached. But I fear the story may be apocryphal.
I did not see it with my own two eyes.
I think this is also true when mathematical economics confirms common sense, though.
If the math was included at the beginning and end and the intuition was in the middle, economists of all stripes would become more adept at math.
Sure, you might skip a section on a paper, but you're relying on a large accumulated body of knowledge to back you up on that (and some trust on the publishing system)
On the flip side, a decent amount of sociology and geography use spatial equilibrium reasoning without any of the math and imo are worse bc of it
https://www.tandfonline.com/journals/rhpd20
I always tell my students that we used math for clarity. We say and understand more clearly with math. But sometimes math can defeat its purpose.
https://www.aeaweb.org/articles?id=10.1257/aer.p20151066
It's also funny that I think he means "absolute advantage."
Imho the argument “math is an often misused/misapplied tool in academic economics” is *much* stronger than “math adds no value to academic economics beyond what we already have via ‘economic intuition’ “
In my experience a lot of “intuition” is false/wrong
There's the plain-English meaning of an instinctive feeling or understanding without conscious reasoning.
Or the opposite econ-speak meaning of the logical step-by-step thought process.
Where do his numbers come from?
Is there any indication that the vast majority of people interested in economics don't/can't understand the math?
Who has ever read the conclusion of a paper?
I had a growing feeling in the later years of my work at the subject that a good mathematical theorem dealing with economic hypotheses was very unlikely to be good economics: and I went more and more on the rules---
(1) Use mathematics as a short-hand language, rather than as an engine of inquiry.
(2) Keep to them till you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life. (5) Burn the mathematics. (6)
If you can't succeed in 4, burn 3. This last I did often. https://www.rasmusen.org/zg601/readings/marshall.htm
The “common sense intuition” he is appealing to already has math baked in!
Intuition can tell you why something goes up if there is one force pushing it. If there is one force pushing something up and another pushing it down then without math, it is all bullshit. My papers use math to resolve these battles.
I trust the theorist and the peer reviewers, and that trust allows me to save time.
When it’s time to read a paper critically, I often skip the introduction and go straight to the methods/math
Empiricism, ah! The test of any intuition or conclusion, mathematically-assisted or not, is what it tells us about reality, which requires empirical testing. Math is a useful, often necessary, tool in science for elaborating the consequences (maybe unforeseen or unexpected) of initial assumptions.
Though most people working in this field have very limited interest in economic theory, a lot of careful mathematical statistics was quickly needed to stop these practitioners from making big mistakes.
You need a net financial asset that has its liability side booked outside of the private sector
Math can’t account for law
It often doesn’t account for net vs gross financial assets
I can create an infinite amount of Katie Bucks. And you might even accept my IOU in exchange for your house.
But only if you think your gas station might accept Katie Bucks too.
Plus:
1/2
Only if you think a court will adjudicate the contact of you accepting Katie Bucks in exchange for your house.
But, you’ll still want at least some government created pounds because that’s the only thing your government will accept as payment of taxes & parking tickets
2/3
Finally, just as your net savings must come from outside of your household, the private sectors net savings must come from outside of the private sector.
Governments create our net financial assets
Private credit = Private debt
So nets to 0
Gov credit = Private net savings
This 💵 here is how you settle both your tax obligation & pay your bank back.
“This note is legal tender for all debts, both public and private”.
1) read title
2) read abstract
3) read model
4) read formal statements of all results
5) skim proofs of results that are very interesting and not fully expected
6) reflect on my life choices