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Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

bradford-delong.com

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Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#11

Post by ecnal »

jbmorgado wrote: post #9
AnimalMuppet wrote: post #5

Earlier quoted context omitted.

Which, arguably, shows that economists were not as useless as a group over 2008-2018 as they were over 1929-1935.

Why not? Minimising these impacts it's about finances, not economics. I.E Economics is about predicting these things (which they absolutely didn't), finances is about putting mechanisms in place so that if they happen they will be minimised.

The vast majority of economics is not macroeconomic forecasting. That's somewhat akin to saying that computer science is about making email work.

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#12

Post by VHRanger »

carsongross wrote: post #7

Because they don't take debt, in particular private debt, seriously, including Krugman and Delong. Steve Keen explains how wrong this is.

Nobody takes Steve Keen seriously. He doesn't even have a university job anymore.

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#13

Post by Gibbon1 »

akinalci wrote: post #10
naravara wrote: post #8

Earlier quoted context omitted.

Nobody thinks national debt doesn't matter. They think the long term costs of endemic poverty or economic stagnation outweigh the long term costs of carrying a deficit.

We have this big problem. We'll just patch over it with this other problem and call that a reasonable strategy.

The elephant in the room is we don't have enough inflation to re-balance the ratio of income to debt. As a result the ratio of debt to income keeps growing.

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#14

Post by tcbawo »

akinalci wrote: post #10
naravara wrote: post #8

Earlier quoted context omitted.

Nobody thinks national debt doesn't matter. They think the long term costs of endemic poverty or economic stagnation outweigh the long term costs of carrying a deficit.

We have this big problem. We'll just patch over it with this other problem and call that a reasonable strategy.

I think what he's suggesting is that paying down debt through austerity can be more costly than growth, since austerity hurts growth. The trick is, where does growth come from?

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#15

Post by VHRanger »

jbmorgado wrote: post #9
AnimalMuppet wrote: post #5

Earlier quoted context omitted.

Which, arguably, shows that economists were not as useless as a group over 2008-2018 as they were over 1929-1935.

Why not? Minimising these impacts it's about finances, not economics. I.E Economics is about predicting these things (which they absolutely didn't), finances is about putting mechanisms in place so that if they happen they will be minimised.

Economics is not about predicting, it's about understanding things.

It's basically impossible to do the former at scale for time periods over 6 months, we're slowly getting better at the latter.

One big reason economic forecasting is so hard is that agents in the system you are forecasting are taking your present period forecast into account when acting in future periods.

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#16

Post by drak0n1c »

Retric wrote: post #2

Great Depression: industrial production in the United States declined 47 percent and real gross domestic product (GDP) fell 30 percent. In comparison 2010-2014 was a minor blip, with less than 3% GDP drop, that barely qualifies as a correction. I fear central banks have actually gotten to good at minimizing these issues as we could easily do the same thing in another 10 years, where the great depression created far m…

That's true for correction against irrational exuberance in a static environment. This may explain Japan. But the world is usually dynamic. Technological progress, non-monetary fiscal/regulatory reform, new business innovations (of the non-subprime-mortgage flavor), world events, and population growth are rational factors that can simultaneously push up GDP during or following a correction of previous irrationality.

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#17

Post by hkmurakami »

"Economics is a highly sophisticated field of thought that is superb at explaining to policymakers precisely why the choices they made in the past were wrong. About the future, not so much." -- Ben Bernanke, 2013

(the quote is from an unexpectedly funny and thoughtful commencement speech)

https://www.youtube.com/watch?v=Ww6guPQsKQo

http://money.cnn.com/2013/06/02/news/economy/bernanke-prince...

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#18

Post by the_why_of_y »

VHRanger wrote: post #12
carsongross wrote: post #7

Because they don't take debt, in particular private debt, seriously, including Krugman and Delong. Steve Keen explains how wrong this is.

Nobody takes Steve Keen seriously. He doesn't even have a university job anymore.

Are you sure about that?

http://fass.kingston.ac.uk/faculty/staff/cv.php?staffnum=104...

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#20

Post by HeavenBanned »

carsongross wrote: post #7

Because they don't take debt, in particular private debt, seriously, including Krugman and Delong. Steve Keen explains how wrong this is.

If it's anyone who should be taken seriously it's Mark Blyth at Brown. A primer [1].

[1]https://www.youtube.com/watch?v=vSS4GCA__As

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