tag:blogger.com,1999:blog-6837159629100463303.post8529560597205189423..comments2023-06-18T01:25:08.748-07:00Comments on Information Transfer Economics: How should we approach how people think?Jason Smithhttp://www.blogger.com/profile/12680061127040420047noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-6837159629100463303.post-17880868715126049262020-11-06T02:17:42.351-08:002020-11-06T02:17:42.351-08:00Jason: “How should we approach how people think?”
...Jason: “How should we approach how people think?”<br /><br />Good question. As I have said, different people think differently, even basing their thinking on different concepts, so who decides what thinking is approved? Perhaps to start, we should look at the answers different people give to specific questions. This would at least help figure out the range of thought and who is arguing with whom on each question.<br /><br />Jason: “… [the] typical [economics] approach where you not only assume you know how individuals think but write down simplistic equations for it …”<br /><br />The problem here is that “the typical economics approach” is the mainstream economics approach and the libertarian approach. It is not the Keynesian approach or the Marxist approach.<br /><br />Try this approach. Write down a relevant economic question of your choice. Write down a list of economic “schools of thought” in order from the political right to the political left. Write down the answer that each school of thought would give to your question. Add in your answer. Discuss the results.<br /><br />For example.<br /><br />Q: Is thinking based on a representative individual central to macroeconomics?<br /><br />A:<br /><br />Libertarian: Yes<br />Monetarist: Yes<br />New Keynesian (Mainstream): Yes<br />Post Keynesian: No<br />MMT: No<br />Marxist: No<br />Jason: No<br /><br />For this example, I will add in my answer:<br />Jamie: No<br /><br />You need to understand how other people would answer your question before you criticise them. Note that you are questioning mainstream economics here – not economics in general. Many heterodox economics talk about “methodological individualism” in a disparaging tone. In essence, they are making the same argument as you, using different words.<br /><br />Yet one of your most common conclusions is that we should listen to the likes of Noah Smith (from the mainstream) when he dismisses the heterodox even though, in this case, your argument is with Noah Smith and the mainstream, and the heterodox people are on your side. That makes no sense especially as your approach is itself heterodox – as all heterodox means is anything outside the mainstream.<br /><br />One of the most interesting questions in economics for me is “why did the New Keynesians and the Post Keynesians fall out when they are both, nominally, in the Keynesian tradition”? One of the prime reasons was methodological individualism. Basically, the New Keynesians got into bed with the libertarians (who are fundamentalist individualists) in an attempt to create a “science” that covered multiple schools of thought.Jamiehttps://www.blogger.com/profile/03489060325921337036noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-35499819937760196562020-03-03T10:11:42.955-08:002020-03-03T10:11:42.955-08:00I think you might have meant this comment for this...I think you might have meant this comment for this post?<br /><br /><a href="https://informationtransfereconomics.blogspot.com/2020/02/leaning-over-backwards-health-care.html" rel="nofollow">https://informationtransfereconomics.blogspot.com/2020/02/leaning-over-backwards-health-care.html</a><br /><br />But I don't believe it's necessarily better in peer reviewed journals — the focus of the "internet rando" comment was that a) we have no idea what RCA's background is and he purposely hides his political motivations, and b) you'd think someone who had some stats and a reputation to keep might realize their mistake when it's pointed out that R^2 doesn't work that way — but an internet rando won't. Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-50095940678240092492020-03-03T08:14:38.265-08:002020-03-03T08:14:38.265-08:00You have a lot more confidence in academic publish...You have a lot more confidence in academic publishing standards than I do, if you think this sort of problem only shows up in analyses by internet randos.<br /><br />Though perhaps things are a little better in economics than in other fields.NotPeerReviewedhttps://notpeerreviewed.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-11827590169362531222020-02-13T17:31:44.442-08:002020-02-13T17:31:44.442-08:00Thanks ... and interesting!Thanks ... and interesting!Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-36987358060871538642020-02-13T07:49:27.792-08:002020-02-13T07:49:27.792-08:00I love this post. Modelwise, I also believe that y...I love this post. Modelwise, I also believe that you can recover 'optimizing' aggregates from random individual behavior (for large N) through statistical mechanics, something like this<br />https://en.wikipedia.org/wiki/Laplace%27s_method<br /><br />The aggregate optimizes some quantity not because all individuals are rational optimizers, but because this optimum dominates the expectation.<br /><br />I'm still looking for a way to frame this observation that might convince economists...Neuromancerhttps://www.blogger.com/profile/03592834539415647063noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-88727368791354599092020-02-10T15:06:26.234-08:002020-02-10T15:06:26.234-08:00Thanks Tom. Mostly what's different here is th...Thanks Tom. Mostly what's different here is the direct comparison between a utility maximization approach and information equilibrium along with comparing both in terms of algorithmic complexity.Jason Smithhttps://www.blogger.com/profile/12680061127040420047noreply@blogger.comtag:blogger.com,1999:blog-6837159629100463303.post-12572920023073218872020-02-10T14:58:18.252-08:002020-02-10T14:58:18.252-08:00I'm looking forward to digging into this one a...I'm looking forward to digging into this one a bit more. It seems you're covering some familiar territory (i.e. Gary Becker), which is just fine with me. Also, I like animations!By The Wayhttps://www.blogger.com/profile/11544413001329820101noreply@blogger.com