tag:blogger.com,1999:blog-6837159629100463303.post7851677392029558102..comments2023-06-18T01:25:08.748-07:00Comments on Information Transfer Economics: The reason for the proliferation of macro models?Jason Smithhttp://www.blogger.com/profile/12680061127040420047noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-6837159629100463303.post-20871090695175539792017-05-03T13:17:12.321-07:002017-05-03T13:17:12.321-07:00Yeah, deductivism is a pretty good way to put it.Yeah, deductivism is a pretty good way to put it.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-68833041045050631672017-05-03T13:16:28.573-07:002017-05-03T13:16:28.573-07:00I think econ 101 influences public opinion much mo...I think econ 101 influences public opinion much more than the latest DSGE model, but yeah.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-81426873509846344922017-05-02T12:04:05.522-07:002017-05-02T12:04:05.522-07:00This is from: Werner, Richard (2005), New Paradigm...This is from: Werner, Richard (2005), New Paradigm in Macroeconomics, Basingstoke: Palgrave Macmillan<br /><br />“The return of inductivism <br /> <br />We found that the main macroeconomic theories have two features in common, apart from their insufficient empirical track record. Firstly, they share the deductive research methodology which does not primarily base the development of theories on empirical observation, but instead emphasizes axioms and theoretical postulates that may be far removed from reality. The predominance of this methodology is virtually unique among the academic disciplines. Secondly, they are based on the traditional quantity equation linking money to the economy. There are good reasons why the natural sciences are based on the inductive research method. Of course, the inductive research method does not exclude deductive processes. In fact, inductivism uses deductive logic, but it places priority on empirical data and has sequenced research tasks such that empirical work is allowed to lay the foundation for the development of theories, which are then also tested, suitably modified and applied to reality. Such an approach meets the criteria for gaining knowledge and wisdom far better than deductivism, which has dominated economics in the English <br />158 <br />New Paradigm in Macroeconomics Applying the New Paradigm <br />159 <br />language. Nevertheless, if deductive mainstream economics had been empirically successful, one might have wished to tolerate its unusual methodology. However, the fact that major challenges exist to the fundamental tenets of macroeconomics means that the deductive approach cannot be sustained. This is not to say that deductive, mainstream economics has not served any purpose. As we saw in the Prologue, it has taught us many things, including how highly unrealistic the theoretical environment must be in order to obtain market clearing and a situation where government intervention in markets will always be inefficient. Furthermore, mainstream economics has developed a rich tool-kit for the economic sciences, which will prove useful also for the new paradigm. Also, it has proven far more fruitful in microeconomics and applied disciplines, including finance. Thus there can be no doubt that mainstream economics has advanced knowledge. However, economists should aspire to acquiring a degree of wisdom. The empirical approach of a new paradigm requires data. By the time data becomes available, it is about the past. Thus history provides the data set upon which theories should be built. The solutions offered in this part of the book are the result of years of conducting empirical research according to the inductive methodology, and the desire to explain the true cause of things, as best as possible, without being beholden to any preconceived idea or ideological blinkers.”<br />https://goo.gl/M9prsg<br />Postkeyhttps://www.blogger.com/profile/11747509012748106827noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-74026919529469575352017-05-02T10:28:43.064-07:002017-05-02T10:28:43.064-07:00"people just posit "what-if" models..."people just posit "what-if" models in macroeconomics ... and then continue to consider them as .... um, plausible descriptions of how the world works ... um, without testing them?"<br /><br />Well, I guess that sums up what mainstream economics is all about. (Maybe I could say economics in general?)<br /><br />It's all about a bunch of non tested models that heavly influences public opinion and political decisions...<br /><br />Andréhttps://www.blogger.com/profile/10935332922520483975noreply@blogger.com