Economists’ projections of interest rates and unemployment have proved too high • Hacker News Board

Re: Economists’ projections of interest rates and unemployment have proved too high

#31

Post by qubex » Mon, Dec 16, 2019, 5:51 PM UTC

larrysalibra wrote: post #20

qubex wrote: post #10

Earlier quoted context omitted.

Satoshi got it extremely wrong, to the point that if he had any economic background at all I’d suspect the first wave of crypto currencies to be a sick joke: artificial scarcity (and more generally, inflexible money supply) of the kind engendered by bitcoin and its ilk are the exact embodiment of what money must not be if one is to not artificially crimp the economy’s growth. There’s a very good reason why we came of…

"we" came off of the gold standard because Nixon was having trouble paying for the Vietnam war. Printing money doesn't create wealth, it redistributes it to the printer: this is seigniorage and it is a tax https://en.wikipedia.org/wiki/Seigniorage

No, the Gold Standard effectively died when convertibility of paper currency into gold was suspended, starting with the Gold Reserve Act of 30 January 1934 and subsequently elsewhere.

The post-WWII Bretton Woods regimen of “gold standard without domestic convertibility” definitely falls short of meeting the gold standard for gold standards: absent any audit of extant gold reserves, the price of gold (dictated by a purely hypothetical estimation of availability) served as a fixed exchange-rate (and thus implicitly fixed relative real rate of risk-free interest) and not as a true gold standard.

To say that Nixon dictated the end of the Gold Standard is as myopic as to suggest that the surgeon who removes the organs from a brain-dead patient is guilty of murder.

Re: Economists’ projections of interest rates and unemployment have proved too high

#32

Post by oblio » Mon, Dec 16, 2019, 5:52 PM UTC

drcode wrote: post #18

qubex wrote: post #10

Earlier quoted context omitted.

Satoshi got it extremely wrong, to the point that if he had any economic background at all I’d suspect the first wave of crypto currencies to be a sick joke: artificial scarcity (and more generally, inflexible money supply) of the kind engendered by bitcoin and its ilk are the exact embodiment of what money must not be if one is to not artificially crimp the economy’s growth. There’s a very good reason why we came of…

Satoshi used his/her economic theories to create a 100 billion market cap asset from literally zero... what would they have to do to convince you folks that they were on to something with their ideas? Also cure cancer?

There's been fads bigger than Bitcoin that no one remembers anymore.

The true test of Bitcoin is longevity.

Re: Economists’ projections of interest rates and unemployment have proved too high

#33

Post by qubex » Mon, Dec 16, 2019, 5:53 PM UTC

raxxorrax wrote: post #27

Rerarom wrote: post #11

Earlier quoted context omitted.

There's something I don't get about endogenous money vs. fractional reserve. Namely, the factual claims. So fractional reserve says that money is created by loans between banks as restricted by the money multiplier and endogenous money says that banks can create unlimited money. [1] My question is not which of these is true but rather how can this be under dispute? Aren't the workings of banks established by laws and…

As a non-economist: Is there really any practical difference by now?

As an economist: yes.

Re: Economists’ projections of interest rates and unemployment have proved too high

#34

Post by aishvar » Mon, Dec 16, 2019, 5:53 PM UTC

tuberelay wrote: post #23

The official US inflation measure is garbage. It doesn't include enough of the big 3 costs in people's lives : housing, education and healthcare. It includes whacky stuff like "oh your cellphone is faster now than 5 years ago, we're going to say that you're getting 10x the phone for roughly the same price and use that to disprove inflation". It ignores asset inflation (stocks, real estate, venture capital, everything…

That's just flat false.

Look at the latest CPI report:

https://www.bls.gov/news.release/pdf/cpi.pdf

It includes the list of items, weightings, and price changes.

All 3 of those (shelter, medical care, and education) are on there.

Re: Economists’ projections of interest rates and unemployment have proved too high

#35

Post by doublement » Mon, Dec 16, 2019, 5:54 PM UTC

drcode wrote: post #18

qubex wrote: post #10

Earlier quoted context omitted.

Satoshi got it extremely wrong, to the point that if he had any economic background at all I’d suspect the first wave of crypto currencies to be a sick joke: artificial scarcity (and more generally, inflexible money supply) of the kind engendered by bitcoin and its ilk are the exact embodiment of what money must not be if one is to not artificially crimp the economy’s growth. There’s a very good reason why we came of…

Satoshi used his/her economic theories to create a 100 billion market cap asset from literally zero... what would they have to do to convince you folks that they were on to something with their ideas? Also cure cancer?

Bitcoin isn't used for anything except to transfer dollars from regular buyers to miners and/or large early adopters.

Re: Economists’ projections of interest rates and unemployment have proved too high

#36

Post by Mirioron » Mon, Dec 16, 2019, 5:55 PM UTC

qubex wrote: post #10

martindale wrote: post #6

Satoshi got it right; "Chancellor on Brink of Second Bailout for Banks" — 10 years and running strong. Seems the Austrians are winning back a century of lost ground!

Satoshi got it extremely wrong, to the point that if he had any economic background at all I’d suspect the first wave of crypto currencies to be a sick joke: artificial scarcity (and more generally, inflexible money supply) of the kind engendered by bitcoin and its ilk are the exact embodiment of what money must not be if one is to not artificially crimp the economy’s growth. There’s a very good reason why we came of…

>There’s a very good reason why we came off the so-called Gold Standard (bimetallic standard, actually), and why coming off it heralded the greatest period of economic growth in Western history.

How sure are we that this was a good idea in the long run? Politicians and their appointees aren't always the most responsible people. If it's possible for them to obfuscate some of their spending without upsetting people then we could end up with quite a surprise later. The US already has a big debt problem. I get where you're coming from, but I'm just not sure whether we know the long-term consequences of this.

Re: Economists’ projections of interest rates and unemployment have proved too high

#37

Post by legitster » Mon, Dec 16, 2019, 5:55 PM UTC

DubiousPusher wrote: post #30

I'm not a subscriber so I can't read the article but I have a personal hypothesis about this. Developed economies have begun to enter a post scarcity state. Daily goods like food and household items are not responding to inflation because they are no longer scarce. The combination of economies of scale, automation and cheap foreign labor have brought many goods to this point. Meanwhile, things which are still governe…

Whether intentionally, you are describing the Baumol effect - where productivity gains in some sectors actually cause other sectors to become more expensive in comparison.

Re: Economists’ projections of interest rates and unemployment have proved too high

#38

Post by sideshowb » Mon, Dec 16, 2019, 5:55 PM UTC

gonational wrote: post #25

If you can find me economists that have predicted economic activities/results with any level of accuracy (e.g., greater than 50% even), then I will find you ~10 times as many prominent economists who have predicted the opposite. Economists probably predict things accurately at a rate lower than throwing a 20 sided die into the air and guessing which number will be facing up when it lands. Does that matter? Well, if t…

> TBH, why do we even care what “economists” think at all, given the above? Economists are no better, from an objective value perspective, then tarot readers

Because the people with data to prove this are themselves economists. Yes, economics has had a lot of failures (I often find myself informing people of these) but anything you replace it with is ultimately going to be another form of economics.

For every successful business leader you could probably find 100 who failed: taking your guidance from business leaders just leads to survivorship bias.

Re: Economists’ projections of interest rates and unemployment have proved too high

#39

Post by imglorp » Mon, Dec 16, 2019, 5:56 PM UTC

Someone please correct my impression here, but why aren't both macro- and micro-econ viewed as a largely academic ideal that completely ignores many realities of human civiliation?

I'm thinking specifically of malice and manipulation, at all levels of all systems: if there is a way to enrich (ie steal), motivation is towards it happening and towards weakening rules and oversight. For example, who wants to quibble over peanuts like $1T federal deficits or $10T NASDAQ total caps when there are $370T tied to the LIBOR, which has a big fat steering wheel on it? Your econ textbook doesn't have a nice chart for that.

https://www.bloomberg.com/news/articles/2018-05-06/libor-ref...

Re: Economists’ projections of interest rates and unemployment have proved too high

#40

Post by qubex » Mon, Dec 16, 2019, 5:56 PM UTC

koheripbal wrote: post #12

qubex wrote: post #10

Earlier quoted context omitted.

Satoshi got it extremely wrong, to the point that if he had any economic background at all I’d suspect the first wave of crypto currencies to be a sick joke: artificial scarcity (and more generally, inflexible money supply) of the kind engendered by bitcoin and its ilk are the exact embodiment of what money must not be if one is to not artificially crimp the economy’s growth. There’s a very good reason why we came of…

Bingo. Money is only a useful medium of exchange if it is stable, and deflationary currencies are inherently volatile.

The volatility of bitcoin has nothing to do with its eventual theoretical maximum (and therefore extremely long-term contraction, as the theoretical maximum will be subject to corruption, loss, and so forth).

The volatility of bitcoin and other cryptocurrencies (or more accurately, crypto-assets) is due to their extremely shallow markets and unpredictable volumes.