Here's a discussion question to get the ball rolling:
A study from last year found that 40% of economics experiments failed to replicate. Is this good, or bad news? What does this study mean for the debate on whether economics is a "hard science", "soft science", or a science at all?
Source: http://www.sciencemag.org/news/2016/03/about-40-economics-experiments-fail-replication-survey
>>910714
This is really a thread for /biz/, and I don't really think it has much effect on economics status as a science, social sciences have always been soft with difficult to reproduce results.
I think this is good news. A 60% replication rate doesn't seem bad at all for a social science.
Also, it's useful to compare this to the same initiative taken for psychology. Psychology is a "harder" science than economics, but only had a 36% replication rate (http://science.sciencemag.org/content/349/6251/aac4716)
Overall, I just like that people are waking up, and these replication studies are very good and should improve the social sciences.
>>910714
I don't think its good or bad within itself. But it shines a light on the limitations of economics as a science. There are many unknown variables at play in an economy that are simply impossible to isolate.
Does Soros' theory of reflexivity have any merit? His other activities aside
>>910714
Anyone else take issue with all the ideology involved with this field? I'm a freshman and I hate saying I support a certain policy and being told "you must be a socialist" or "you must be a libertarian". Why do economists have to be this way???
>>911428
>i'm a freshman
This shit becomes a lot more gray the less lower-level classes you take. In the beginning everything is very clear cut because its based on principles that are strictly taken from definitions and mathematical set theory. As you go up in level, you begin to see how principles break down in the face of reality. Also, ideology is kind of inherent. Economics deals with decisions. It just so happens that many decisions on big matters are already in bed with certain ideologies, so you can't really separate them easily.
>>910714
I don't remember exactly, but if you look farther into the issue, a lot of replication issues are resolvable. It was either an issue with how the experiments were structured, or sources being unlisted, etc. But as well as this, there are limitations. Economics is still rooted in sociology which is as soft as you get. The more uncontrollables, the harder to validate. Machine learning is the future.
>tfw I'm starting to agree with Bernanke
Send help
>>911802
Why? Bernanke is a smart guy.
>>911428
>>911467
further mucking the field seems to be the clearly partisan distinction between freshwater schools (Chicago/monetarist/right-leaning) vs saltwater schools (New York/Keynesian/left-leaning), and a lot of times economic doctrine are adopted as part of an umbrella doctrine for those who lean one way or the other.
My girlfriend's father is a reverend with no interest in politics but if you get him to define his economic views he would tend towards freshwater because that's the right-wing evangelical culture that he inhabits.
I have a few questions I hope you guys can help me with:
>1. Why aren't Economists (especially those with PhD's) millionaires? Aren't they experts when it comes to markets and what things affect it?
>2. What is a degree in Finance? What do you actually learn?
>What does this study mean for the debate on whether economics is a "hard science", "soft science", or a science at all?
There isn't any debate. Everyone outside of economics departments already know that economists shouldn't be taken seriously.
Literally the only people on the planet who think that economics is a science are economists themselves
>Social """""""" sciences""""""""""
>>912164
I view economics as fairly reactionary, not predictive. Do people really think you can use economics to predict markets?
>>911802
>>911820
>Conservative """Inflationist""""
No thanks.
>>910714
Econ is not a hard science. It's harder than other humanities.
>>912151
>1. Why aren't Economists (especially those with PhD's) millionaires?
If you're on PhD track, you plan on teaching. Economics profs make a very good income if you can get tenure compared to any other social science. Still less than going private sector though.
>Aren't they experts when it comes to markets
They may be, or they might be more interested in niches or broader theory. They prefer academic research, because that's what PhDs do. Economics might revolve around money, but some people are more interested in studying it than making it. Being an academic gives you a lot of freedom to do what you want instead of writing what other people want you to write.
>and what things affect it?
Money and other forms of economic privilege affect it for private individuals. Something most people don't have. On the other hand, if they want to affect the market in terms of government policy, academic's opinions are widely used.
>2. What is a degree in Finance? What do you actually learn?
It's a fancy name of financial accounting. It's an accounting degree.
>>912187
Masters of Econ make on average more money here than STEM masters.
Stembabbies are just mad someone makes more money than the,
>>911820
For you
>>912189
Yeah, masters going private sector make money, but they're not PhDs, which is what he was asking about. Also, going private sector (or think tank) often times means being a paid shill. The thing is you're shilling for some really rich people who will reward you handsomely.
>>912198
Because they aren't day traders, they have jobs to do, like being a starving adjust professor. Speculative investment is also a small subset of economics, and not everything is easily predicted even if you know economics. Hedge funds may have several full time experts working 24/7. Stocks can also be unpredictable and volatile. An economics professor might be able to explain the volatility and jumps and dips. They might not have the capacity to filter through all the data and make a specific prediction, or there simply might not be enough data to make a prediction.
>>910714
I look at it as economics view past patterns and create hypothesis and models in order to explain what they have saw.
It is distinctly reactionary as it would be very hard to carry out repeated economic experiments with all variables controlled at any large scale.
>>910714
Of course it is bad news.
>>912198
I took an investing class in college where the professor had us work out the math to prove that the market is basically impossible to predict mathematically. It's simply too random.
Making wise and prudent investments is as much art as it is science, since there are a whole host of reasons why one business succeeds while others fail, which may not be readily apparent with just a precursory studying of the company or a skimming of their quarterly statements.
>>912891
What else there is to it than checking the company's history of paying dividents, understanding how it gets its money and making an educated guess that it'll be worth more in the future?
Only a few economists work with experiments.
>>911428
Economics is a lot less ideological than other fields in the social sciences and humanities.
This is probably one of the reasons why it is in a better shape than sociology and the others.
>>910714
Economics is cut from the same cloth as statistics, in that the discipline exists so politicians can justify their stances and policies. And as >>912283 stated economics can only view economic developments and trends after the fact, it's incapable of truly predicting it because there are too many variables especially on a macro level
>>913957
The other investors are equally as smart and have as much knowledge as you have.
>>914018
A lot of economics topics don't deal with policy. And many of the ones that do deal with policy give answers that are unpopular among politicians.
>>914007
>Economics is a lot less ideological than other fields in the social sciences and humanities.
Isn't that more true to micro than macro though? Anyhow I think it hasa lot to do with economics being so mathematics oriented compared to other social sciences and having a lot more homogenized curriculums between different institutions compared to something like sociology.
Thoughts?
>>914030
It is true for both micro and macro. Neither is nearly as ideological as any other social science. Not that this is a hard feat.
>>914098
Krugman had an interesting (and fairly hypocritical) response to people who called econ a soft science. He said it's a hard science that uses empirical evidence but that too many economists are only interested in pushing their own agenda/school of thought and reject the scientific method. Funny coming from him.
>>914127
I dunno man, I think macro can get pretty ideological.
>>914166
Not compared to sociologists or people in the rest of the humanities.
>>914098
He was sort of in the right in the late 90s.
Hes keeps on going 'I told you so!' from what he suggested back then, to legitimise his thoughts and his opinions.
Hes popular with younger crowds for his short 'essays' about developmental economics the economy post 2007. But these are extremely opinionated.
If you want a better developmental economist go read Ha Joon Chang 2bh.
>>914187
Ha Joon Chang is a hack. Krugman for all his faults is a Nobel laureate.
If you want to learn about Economic development read the book by Charles Jones on Economic Growth.
Or read Daron Acemoglu's Why Nations Fail, along with Bill Gates' review of it.
If you want to understand growth, you need to understand the Solow model and productivity.
>>910714
>A study from last year found that 40% of economics experiments failed to replicate. Is this good, or bad news? What does this study mean for the debate on whether economics is a "hard science", "soft science", or a science at all?
Economics is a 'science' in the same way history is - ie not at all.
t. Economist
>>910714
I'm getting my degree in econ next year. I'll give you my insight from what I've learnt. First of all economics is the most ideological field to study (maybe besides the so-called 'gender', 'race' etc. studies).
As the description of the whole human system of interaction economics is dealing with - at the same time - the interconnection of structures and individuals.
This is almost impossible to replicate as a mathematical model only which is happening in academia since those microeconomists little fuckers came.
>"hurr durr, but mathematics are more rigorous"
I will not open a debate on the methodology of social sciences but just look at that and you'll understand that rigor is the main concern in those fields. Then again I'm not agaist using a mathematical model but the problem nowadays is that is blinds us and uses its suposed rigorness to veil a part of the actual truth (which is what is the object of searching in academia).
Don't forget that a mathematical model will never be able to predict 100 % a priori events in multicausal intersubjective relations.
pic unrelated
>>914219
I call bullshit on this.
>>914219
r u me? Seriously, this could have been written by me word for word.
t. Econ M.Sc
>>914219
>>914247
Neither of you are economists. Economists don't write like this, know that most Economic theories are much less ambitious than this and that mathematical models are only useful simplifications that have the advantage of being clearer. And any economist that has had some contact with other social scientists know that most of them don't care too much about rigor, regardless of mathematics.
>>914274
>implying their not the same person
>>914187
>Chang
Fucking hell, mate. The guy is a complete idiot.
>>914247
nice ! happy to see other econ students seeing outside the box ! Actually I have the opportunity to study micro, macro, maths and sociology which really broadens one's views.
>>914246
y mane ?
>>914274
I really depends on what you define as an economic theory. For example Marx, von Mises, Hayek where having really ambitious models.
Regarding rigor in social sciences from my experience it is crucial to the development of a meaningful theory. Methodology was the foundation of the most famous sociologists like Durkheim, Weber, Marx (again hehe), Castoriadis, Elias, Lukacs and so on. This of course also applies to other social sciences like philosophy or history for example.
Maths is what's killing social sciences because when you give tools like that to people before introducing them to a proper critical and axiomatically neutral method they will apply it to all sorts of wrong things.
pic still unrelated
>>914187
>chang
Trash
>>914336
You obviously are not an economist. Marx, Mises and Hayes are marginal figures in Economics.
>>914274
My experience with economists, in practice or academica, is that they often get blinded by their models. We're only human, and so we get blinded to the terrain when we are handed an ostensibly correct (but not really) map. Maps trump terrain, with disastrous consequences. It takes a very dexterous mind to see beyond the map, or only use it as a finger-pointer.
>>914336
>nice ! happy to see other econ students seeing outside the box ! Actually I have the opportunity to study micro, macro, maths and sociology which really broadens one's views.
Nice to meet another as well!
>>914351
well I could also ramble about Pigou, Ricardo, Schumpeter, etc. But that's only the classical approach of economics I just wanted to show a variety of people that would show how big the rage of study is in economics. Don't be upset man, maybe you don't study such authors in your country but I assure you that they are capital to a global understanding of what economics is.
>>914389
This style of economics is not done in the last 50 years.
>>914098
worst noble winner since al gore
>>914465
>our conception of the world is not determined by preceding ideas
>modern economics is not neo-kaynesian at best and neo-classic most of the time
>mfw
pls go
>>914027
>A lot of economics topics don't deal with policy
And yet they heavily influence policies. The discipline is highly politicized by it's nature, with economists often taking stances that reflect their own political beliefs.
>>914583
Economists don't think in schools. Also, not all economics is macro economics. Why are you pretending to be an economist here? You are probably a sociologist that has read about economics on blogs.
>>914597
You overrate the influence of economists. And most research is not something that will appeal to partisan politics.
>>915169
pls stop embarrassing yourself
Has anyone compiled a recommended reading list for economics here that isn't hugely disputed? My local library has run out of decent things to read so I'd like to have some general pointers when it comes to actually buying something.
>>915193
He is right, you are a sociologian. You have the knowledge of someone who learned "economics" by reading De Long's blog.
>>915727
>Has anyone compiled a recommended reading list for economics here that isn't hugely disputed?
Introduction to Economics = Mankiw
Microeconomics = Varian
Macroeconomics = Blanchard
International Trade = Feenstra
Finance = Brealey, Myers or Bodie Kane and Marcus (it is all the same, really)
>>913957
DESU I don't remember the exact equations, but I do remember it being a lot like trying to predict the weather: conceptually it's a simple idea, just measure the position and velocity of all the moving parts and calculate where they'll all be in a month. But in practice there are simply way, way too many variables to make that kind of prediction with any degree of accuracy.
Then you have people who study macroeconomics just like you have scientists who dedicate themselves to the study of the climate. But a climatologist possesses neither the tools nor the skill sets to tell you if its going to rain next Thursday, just like knowing how the economy functions at its broadest levels doesn't mean that you have any idea what the stock market is going to do in the coming week.
And according to the oracle of Omaha, the key to prudent investments is to invest like a woman. AKA you make investments in companies the way that a woman ought to let men into her vagina: only after you've done enough research to conclude that your interests and values are in alignment. It takes patience, conservatism, requires that you play the long game and be meticulous and choosy about the guys with whom you enter into a relationship.
>>916483
This. Long term value investing seems to be the best option for success.It's not as fast as being an active day trader but it's much less risky
>>914166
You're projecting. Macro models that are grounded in micro are always preferred.
It's a social social, a soft science.
It's job is to find the best probable course of action, not what is or isn't a fact. It is essentially finance/statistics applied to a population.
>>915193
Economists don't follow the "great author" mentality. Even the final incarnation of the schools >>912040 only really exists in the minds of "commentators" and doesn't really demonstrate concrete divisions within the academic community; at best, you have "great papers" which are useful to cite in ongoing research, the main thing that comes to mind for me are papers that demonstrate the validity and utility of various models and econometric methods; maybe a few textbooks which are well-written, too. Economics has lost its idiosyncratic tendencies with the introduction of mathematics and statistical methods within the field.
>>916067
He's probably using "ideology" in the Marxist sense, where Marxism is science and physics is ideology. Kinda like Foucalt's knowledges, from what I understand.
>>914336
>Marx, Von Mises, Hayek
is your degree from r/economics?
I don't know know anything about economics but isn't it funny how libertarian and small government types are (usually) the same people who oppose immigration? how are you going to deport 11 million people without a strong central government? also freedom of movement is one of the core tenets of free trade.
>>916483
>>916533
/biz/ here. Long term investing is just as much of a meme as daytrading, but it takes significantly less liability/skill to turn a profit.
You shouldn't be investing in either unless you understand stocks. You could also learn something like real estate, but that is also risky and has high liability. You may have to start a small business
>>914351
Hayek is far from marginal bro what the hell are you talking about
>>917319
That was basically my point. People who hop right in without the proper knowledge are basically gambling. And considering the crazy large percentage of small businesses which fail in the first year, I think it's safer to say that there is no easy way to make a buck, you have to put in the leg work regardless of how you plan on going about it.
But what do you think about Warren Buffett's winning bet against Protege Partners? High flying hedge fund managers getting their asses walloped by humble index funds. Without having too much technical knowledge of the field that seems to make a pretty good case for "slow and steady wins the race".
>>917287
>Even the final incarnation of the schools >>912040 (You) only really exists in the minds of "commentators"
Oh I already knew that, but it exists in more than just the minds of commentators: it exists in the teeming masses of lay people, the bell curve of the population, so even though it's just a meme, it's an important meme, and it probably explains why >>911428
was having those kind of issues in his freshmen class. You see both sides of the aisle indulging in it. And outside of that small world of specialized academics and full-time professionals you can't escape it. My economics professor in college (who was also the libertarian club faculty chaperone) held views which I could clearly identify as monetarist especially considering that he got his degree from the University of Chicago, and admitted that beforehand he had held views which were Austrian (aka destroy the gubmint, invest in gold and bullets)
I'm taking some intro Econ classes and I just learned about tax and expenditure multipliers. Can someone explain why governments don't spend more money? I mean, even if you tax just as much as you spend it still increases GDP. Is it not actually that simple? Is it stupid political ideology? It seems like free money so I feel like I am missing out on something.
>>919829
This only works under specific circumstances.
>>919829
Gatta check the assumptions under the model you're using. This is kind of a cheat code for the question "why doesnt this work". If that doesn't give you the solution to your question, you need to understand that you're not looking at the chain of effects that occur after that.
>>919829
Because, it is argued, the government is more likely to make poor decisions than the collective will of the people via the invisible hand
I'm a Keynesian though so don't trust what I say on the matter, come to your own conclusion.
>>919829
Look at the assumptions. They usually start teaching those off with models where the country doesn't do foreign trade, inflation doesn't exist and so forth.
Don't know if you'll all just meme on me, but /his/ for the most part seems to take topics pretty seriously without much political bias:
In your intro and intermediate econ classes, didn't it become like, quite immediately obvious that American Republican/ "Right" talking points when it comes to the economy (don't increase the minimum wage and other regulation, inequality breeds growth, perfect competition fucking exists, etc) hold so little water that it's laughable?
I learned so much that demonstrated these talking points to be so ridiculous and provably and empirically false, it made me think: further up the econ ladder, do you learn oh wait, not that shit was bullshit (because the stuff I learned was fairly basic in the grand scheme of things, just micro and macro) and the Right DOES have a point; or, if not that, how the fuck are there still "economists" being trotted out espousing stuff that, at least how I've seen, has been disproven for a god damn century and in that century empirically demonstrated to be disproven.
Thoughts? I'm not trying to be a dick, I just need some context and help.
>>921338
You are extremely politically biased and ignorant of Economics.
Your arrogance is an example of the The Dunning–Kruger effect.
>I learned so much
No, you didn't.
>has been disproven for a god damn century and in that century empirically demonstrated to be disproven.
There is almost nothing with this level of certainty on Economics.
>>921381
Well gee, thanks.
I'd like to learn more about Economics as a hobby, I'm in Physics so I have a solid mathematical basics, can I jump to more advanced texts or should I still follow babby's first college books?
>>921435
definitely start low. Beginner concepts are exceedingly simple to understand
>>921381
Let's take some of the examples:
>don't increase the minimum wage and other regulation,
There is a lot of discussion over this. If you look here:
http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_e9vyBJWi3mNpwzj
They agree that a high enough minimum wage will cause unemployment. This goes along with the Textbook comment on this. The discussion is mostly over the word "substantial".
>inequality breeds growth
There is nothing like this in Economics textbooks.
>perfect competition fucking exists
Perfect competition is a nice simplification for educative reasons (you start learning with simpler models) and that in some markets/situations this assumption doesn't cause any problems. Also, in some markets there is perfect competition, so it does exist.
>>913957
The fundamental problem is that if something is obviously a good bet (its price will go up) then everyone bids up the price until it no longer looks like a good bet.
Basically some version of the efficient market hypothesis is true(ish).
>>921381
Good job not addressing any of the points the original poster made and calling him ignorant instead.
Great contribution, we sure need quality posts like yours here.
>>921456
>there is nothing like this in Econ textbooks
Oh so I definitely didn't learn about Okun, okay then.
>>921475
Thank you. I even pointed in the second half of the post that I'm quite literally asking if you end up learning that the "other side" DOES have merit, which is to say do they mislead you early on when it comes to econ education.
>>921475
see >>921456
He really don't know shit about Economics. Seeing some ignorant fuck with the arrogance to say:
>has been disproven for a god damn century and in that century empirically demonstrated to be disproven.
pisses me off.
Very few things in Economics have this level of certainty, certainly not stuff like minimum wage.
I wouldn't use this kind of words even for things that have a high level of consensus such as free trade being superior to protectionism. There are (very few) economists who support protectionism and I wouldn't say protectionism was effectively empirically disproven.
>>914166
Most macro is ideological in the sense that it uses a model. A model inherently strips some of the complexity (and therefore truth) away.
But the models assumptions are based in historical data and microfoundations. It's just that random stuff like the weather and how hungry you are affect the economy.
It's not something like "big government is good." It something like "given a negative demand shock and sticky wages, an increase in government spending will have a positive affect on unemployment"
>>914218
> I don't have access to your data because it's behind a pay wall
> therefore I can't replicate your experiment
> therefore economics is all silly ideology
>>921486
>Oh so I definitely didn't learn about Okun, okay then.
No, you didn't.
>>921501
Dude, come on. I offered my experience of what econ class was for me - I'm literally asking if it was worthless/ common to have the experience I had.
I was literally taught things that shit all over "the orthodox model", disproving it.
You're being overly-hostile.
>>914597
If that was true we'd have a carbon tax and an ngdp target.
Instead we've got donald trump and the tea party and muh debt people.
>>921519
>Dude, come on. I offered my experience of what econ class was for me - I'm literally asking if it was worthless/ common to have the experience I had.
You didn't learn well enough, based on your points.
>I was literally taught things that shit all over "the orthodox model", disproving it.
It is not because they criticize the "orthodox model" that they are right.
Timocrates said Epicurus was "slovenly, weak, ignorant, rude, and vomited twice a day from overindulgence". Does that mean Epicurus was some Greek Charlie Sheen that over indulged in alcohol?
>>916067
I think we literally had to read all of those at my school. Weird
Was he a social democrat?
>>921528
Most conservative economists support carbon taxes. Or handouts for the poor. Conservative politicians do.
Most liberal economists support free trade. Liberal politicians don't.
>>919829
You're basically correct. During the recovert bernanke basically said the government should be spending more and it would be much more effective than monetary policy at the zlb.
There are more circumstances involed (like slack in the economy, which actually supports your point more), but the only constraint on a country like the US is inflation.
>>921534
,,,that's literally the point of me first posting. Thanks for the help, prof.
>>921338
Ya i'd agree. Especially all the inflationistas and people worried about the government debt like the tea party.
t. Math/econ degree
>>921545
>Hayek
>'social' anything
>>921568
I guess you are repeating Krugman. He basically uses the Macro 101 model. The one thing the other one is complaining that is a right wing propaganda.
Do you really have an econ degree?
>>921587
Not a phd but yes
>>919829
This works if there is spare capacity (that is when you have unemployment). In normal circumstances, it doesn't.
In some cases the multiplier can be negative (when debts are very high).
>>921564
Economics is hard and there is very little certainty. Most people claiming to shit on economics usually are overselling their own capacity.
Take the example of someone who writes with a lot of "certainty". Krugman.
http://krugman.blogs.nytimes.com/2012/05/03/down-argentina-way/?_r=0
Was his arrogance in this text really well founded?
>>921634
Krugman is a clown who hides behind his ill-gotten credentials
I wish Milton were alive today to ruin his shit
