Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Four Basic Truths of Macroeconomics

bloomberg.com

Post reply on HN
Print view View original

161–170 of 286 posts

Re: Four Basic Truths of Macroeconomics

#161

Post by jjav »

xnx wrote: post #7

"I also think measures of price inflation are almost useless over the long run, because a person today consumes a very different bundle of goods than one in, say, 1950." I agree with this wholeheartedly. How do we put a value on the fact that, for the cost of no more than a day's labor, most in the US can have a handheld device with access to nearly the sum total of the world's knowledge and entertainment? No one, at…

The important things people must buy are exactly the same in 1950 and indeed for millenia before. Food, water, shelter, clothing.

Luxuries change century to century and within decades but those hardly matter for inflation since those are by definition not necessities.

Re: Four Basic Truths of Macroeconomics

#162

Post by jjav »

p1necone wrote: post #35
xnx wrote: post #7

"I also think measures of price inflation are almost useless over the long run, because a person today consumes a very different bundle of goods than one in, say, 1950." I agree with this wholeheartedly. How do we put a value on the fact that, for the cost of no more than a day's labor, most in the US can have a handheld device with access to nearly the sum total of the world's knowledge and entertainment? No one, at…

Sure you can have the entire worlds information and entertainment at your fingertips with a $50 smartphone, but if you can't afford to have a roof over your head I'd argue the smartphone is irrelevant. I don't think we should be including basic necessities alongside improvements in entertainment in the same statistic, because it will just hide problems.

> I don't think we should be including basic necessities alongside improvements in entertainment in the same statistic, because it will just hide problems.

Exactly. But you can buy a 50" TV today for less than the price of a car! That hardly matters to anyone struggling to pay rent and the supermarket bill.

Re: Four Basic Truths of Macroeconomics

#163

Post by nstj »

9oliYQjP wrote: post #77
AngrySkillzz wrote: post #64

Earlier quoted context omitted.

it was a joke...

I was piling on but could have done a better job with the opening statement to articulate this, yes. I’ll take every opportunity to point out the Nobel prize issue because I think it has created real harm. The equity of the real Nobel prizes is being exploited to gloss over alarming gaps in the field. These gaps have led to real harm and yet they’re jokingly dismissed. Some of the smartest people in the field are act…

To paraphrase a hedge fund manager speaking on a panel I was watching a while back "The Nobel Prize in Economics has done more damage to the world than the atomic bomb"

Re: Four Basic Truths of Macroeconomics

#164

Post by bawolff »

WalterBright wrote: post #137
bawolff wrote: post #39

Earlier quoted context omitted.

That seems like a silly splitting of hairs. Why stop there? By that logic the recession is not caused by the lockdown but by less businesses being open and reduced consumer spending.

Let's say Bob insults me and I punch him in the nose. Did Bob cause me to punch him in the nose? Of course not. Just like the Terminator, I scrolled through a list of options, and selected "punch him in the nose". I could have selected "your mother is a hamster and your father smelt of elderberries." I could have selected "do nothing".

What's your definition of cause here? Human agency? In that case, people could have decided to donate part of their salaries to businesses they previously frequented,or other rediculous "choices" that humans would never do.

I don't think there is a coherent notion of cause and effect where both covid does not cause the recession and the lockdown does. I can see very restricted notions of cause and effect where neither "cause" it, and more normak notions where both cause it, but not one where one causes but not the other.

And that's ignoring the absolutely rediculous premise that the covid death toll and long term disability toll has no effect on the economic downturn and it was purely caused by the lockdown. There are reasonable arguments that lockdown has been a net positive for the economy in the long run (even more so for non-usa countries that did it competently)

Re: Four Basic Truths of Macroeconomics

#165

Post by throwaway34241 »

sadmann1 wrote: post #92

What are the best introductory books to get more grounded in economics

I have a textbook by Mankiw (one of the other comments here also recommends him) and it seems pretty good. I particularly like how it points out in which areas there is consensus or disagreement between professional economists and the various sides of the debate. It's expensive new but if you hunt around you can get used editions fairly reasonably.

I'd be aware that there are certain heterodox schools of economic thought that are much more popular among non-economists than economists, so it's probably worth trying to find something that presents opposing arguments and isn't too biased.

Also, I don't know about his other stuff but Ray Dalio has some great material if you want a very quick, high level introduction to some macroeconomic concepts that doesn't have much jargon. In particular I remember the introductory video at:

https://economicprinciples.org/

being pretty good. I also liked his free book on debt crises since it breaks down the macroeconomic situation in various country/time periods (inflation, government/private debt, etc) which I thought was more interesting than reading about some of those things in abstract (I also don't remember it being very jargon-heavy).

Re: Four Basic Truths of Macroeconomics

#166

Post by ARandomerDude »

gowld wrote: post #49
AngrySkillzz wrote: post #12

Earlier quoted context omitted.

It is tricky, but they try to apply what are called "hedonic adjustments." [1] If a new iPhone comes out that is way better than last year's iPhone, but it is the same price, then that's deflation! You got more stuff for the same price. Or even if your new plasma TV is more expensive than the old CRT, how do you compare them to decide whether the price level has increased or decreased while attempting to hold "qualit…

Progress is different from deflation. Hedonic adjustments is a trick to steal the benefits of progress from workers.

> Hedonic adjustments is a trick to steal the benefits of progress from workers.

How so?

Re: Four Basic Truths of Macroeconomics

#167

Post by sokoloff »

jjav wrote: post #161
xnx wrote: post #7

"I also think measures of price inflation are almost useless over the long run, because a person today consumes a very different bundle of goods than one in, say, 1950." I agree with this wholeheartedly. How do we put a value on the fact that, for the cost of no more than a day's labor, most in the US can have a handheld device with access to nearly the sum total of the world's knowledge and entertainment? No one, at…

The important things people must buy are exactly the same in 1950 and indeed for millenia before. Food, water, shelter, clothing. Luxuries change century to century and within decades but those hardly matter for inflation since those are by definition not necessities.

If you’re trying to measure inflation of necessities, then non-necessities should be excluded. If you’re trying to measure aggregate, broad-based inflation, you need to consider aggregate, broad-based baskets of goods/services.

Even with the necessity bucket, things change century to century which I think should not be considered luxury. Electric utility service and internet access I do not consider luxuries, but they were obviously not available in 1850 and 1950, respectively.

Re: Four Basic Truths of Macroeconomics

#168

Post by freddie_mercury »

thaumasiotes wrote: post #130
freddie_mercury wrote: post #125

Earlier quoted context omitted.

This is obviously false and all you have to do is acknowledge there are other countries in the world besides the US. Every country in the world was subjected to oil shocks. Not every country had price controls. Every country experienced a recession. Likewise, every country experienced the pandemic. Not every country had lockdowns. Every country experienced recessions. Posts that had simple explanations for complex ph…

> Every country in the world was subjected to oil shocks. Not every country had price controls. Every country experienced a recession. > Likewise, every country experienced the pandemic. Not every country had lockdowns. Every country experienced recessions. I can't speak to #1, but #2 is not a strong argument. Lockdowns covered enough of the world that you would expect to see a recession, on those grounds alone, in e…

Lockdowns had very little effect. People arguing they were responsible for doing anything of significant consequence are arguing based on group affiliation and have not updated their beliefs in light of the actual, empirical evidence.

"This paper examines the drivers of the collapse using cellular phone records data on customer visits to more than 2.25 million individual businesses across 110 different industries.

...

While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 of that. Individual choices were far more important and seem tied to fears of infection. Traffic started dropping before the legal orders were in place; was highly tied to the number of COVID deaths in the county; and showed a clear shift by consumers away from larger/busier stores toward smaller/less busy ones in the same industry. States repealing their shutdown orders saw identically modest recoveries--symmetric going down and coming back."

Re: Four Basic Truths of Macroeconomics

#169

Post by viburnum »

This is a good example of how so much economics is meant to distract you from what’s important. Cowen is framing economics to exclude things like unemployment, the process by which investment, savings, and income are determined, and the distribution of income. If you get people into the weeds about sticky prices and whatnot, it’s like putting blinders on a horse.

Re: Four Basic Truths of Macroeconomics

#170

Post by brazzy »

p1necone wrote: post #35
xnx wrote: post #7

"I also think measures of price inflation are almost useless over the long run, because a person today consumes a very different bundle of goods than one in, say, 1950." I agree with this wholeheartedly. How do we put a value on the fact that, for the cost of no more than a day's labor, most in the US can have a handheld device with access to nearly the sum total of the world's knowledge and entertainment? No one, at…

Sure you can have the entire worlds information and entertainment at your fingertips with a $50 smartphone, but if you can't afford to have a roof over your head I'd argue the smartphone is irrelevant. I don't think we should be including basic necessities alongside improvements in entertainment in the same statistic, because it will just hide problems.

> but if you can't afford to have a roof over your head I'd argue the smartphone is irrelevant.

I'm pretty sure that the vast majority of homeless people would disagree vehemently.

Not only does smartphone make it much easier to find a job and get back to the point where you can afford a roof over your head, it allows you to stay in touch with people you care about, people who may help you out now and then. And it gives you access to lots of useful information that can improve your life, like sources of free food.

Post reply on HN