This article encapsulates a lot of the reasons why I did not change to an economics major at uni even though I had the ability and interest.
In economics 101 we had to memorise a definition of economics that asserted it was a science. It is not. It is the study of human behaviour in the realm of exchanging and developing goods and services.
Using mathematical forecasting models is never going to work well. As soon as the forecasts are announced, people change their economic behaviour and thus the assumptions of behaviour that the model relies on are wrong. Keynes wrote about the important role of the expectations of people and how that has an important impact on economic outcomes.
Ian Verrender writes about other, equally foundational problems with the dislike of economics here:
#economics
https://www.abc.net.au/news/2023-08-01/why-economists-always-get-it-wrong-interest-rates-reserve-bank/102668538
Yvonne Perkins /
npub1qm…tqek0
2023-08-01 08:09:04
Author Public Key
npub1qmzups5z063yz8wtw8p9gstylfcrrc306v0a2xup0k5rutztwahqhtqek0Published at
2023-08-01 08:09:04Event JSON
{
"id": "f6a29441c5b5b8077c395d249a3deb8871fb79828d9fdda55d91e10e24bcea0e",
"pubkey": "06c5c0c2827ea2411dcb71c2544164fa7031e22fd31fd51b817da83e2c4b776e",
"created_at": 1690877344,
"kind": 1,
"tags": [
[
"t",
"economics"
],
[
"mostr",
"https://aus.social/users/perkinsy/statuses/110813337625038269"
]
],
"content": "This article encapsulates a lot of the reasons why I did not change to an economics major at uni even though I had the ability and interest. \n\nIn economics 101 we had to memorise a definition of economics that asserted it was a science. It is not. It is the study of human behaviour in the realm of exchanging and developing goods and services. \n\nUsing mathematical forecasting models is never going to work well. As soon as the forecasts are announced, people change their economic behaviour and thus the assumptions of behaviour that the model relies on are wrong. Keynes wrote about the important role of the expectations of people and how that has an important impact on economic outcomes. \n\nIan Verrender writes about other, equally foundational problems with the dislike of economics here:\n#economics\n\nhttps://www.abc.net.au/news/2023-08-01/why-economists-always-get-it-wrong-interest-rates-reserve-bank/102668538",
"sig": "90ad4e534ac5facac1a26b8097ea643318bc11ecd4f4a156a23f8130289a5c31aadc3d251b547cfe7e91b8b089d2b2751eb316ccc1959d859489342854e70b9f"
}