Danish government makes its new economic model open source • Hacker News Board

Re: Danish government makes its new economic model open source

#111

Post by 7thaccount » Sat, Jan 22, 2022, 5:26 AM UTC

mbar84 wrote: post #88

zwaps wrote: post #83

Earlier quoted context omitted.

Economists do plenty of experiments. As for Econometrics, I agree that studies employing observational causal inference in statistics are much harder (and harder to swallow) than experiments. Usually. But perhaps, if you dig a bit deeper and ask yourself things like: "what makes a hypothesis falsifyable" or, "could there be a hypothesis falsifyable by observational data?". Have your ever written down the exact exclus…

I understand the argument and I accept the idea of natural experiments in principle. The most difficult thing with all of these is the ceteris paribus (holding all else constant), or as a second best, correcting for known confounding factors. This is in such stark contrast to a lab setting, where an adversarial scientist can regard a hypothesis as wrong and construct an experiment to prove it so, only to find out tha…

Not an economist, but my job role involves lots of economic theory and I'm a few classes into an econ masters.

As far as economic reasoning goes, there are some studies you can do (like optimal auction clearing) where you can hold the inputs equal and then adjust some aspects of the optimization (the objective, constraints, or decision variables) and get a very accurate picture of how market changes would impact the results. I think that is probably an exception rather than the normal case though.

In general, my thoughts during my studies has been that the economic theories of supply & demand, incentives, elasticity, theory of the firm, game theory, government intervention...etc all has more use as a generic framework of thinking (ex: if we put in a price cap, here are the expected impacts), rather than an equation I can use to get an exact answer (basically exactly what you're saying above). Doing some kind of analysis on things as complex as the US economy must have massive inaccuracies involved as there are too many factors and even behavioral economics doesn't have all the answers for why people don't always act rationally.

Re: Danish government makes its new economic model open source

#112

Post by abdullahkhalids » Sat, Jan 22, 2022, 5:36 AM UTC

mbar84 wrote: post #67

Economics is not a science like physics. We can't do controlled experiments, we can't falsify hypothesis. This leads to very muddy waters and what you are left with are two kinds of economists: Those who tell people what they want to hear and those nobody listens to. Econometrics gives people everything they want to hear, and with a scientific veneer as a bonus. The HN crowd should however appreciate how susceptible…

Please note that the origins of modern science in Europe lie in astronomy [1]. Astronomy has always has been and is an observational science, yet has been enormously successful at creating models of what we see in the skies.

Would you critique astronomy the same ways as economics? What is the critical difference?

[1] Yes, there was a lot of simultaneous work in other areas as well.

Re: Danish government makes its new economic model open source

#113

Post by grey-area » Sat, Jan 22, 2022, 6:15 AM UTC

abdullahkhalids wrote: post #112

mbar84 wrote: post #67

Economics is not a science like physics. We can't do controlled experiments, we can't falsify hypothesis. This leads to very muddy waters and what you are left with are two kinds of economists: Those who tell people what they want to hear and those nobody listens to. Econometrics gives people everything they want to hear, and with a scientific veneer as a bonus. The HN crowd should however appreciate how susceptible…

Please note that the origins of modern science in Europe lie in astronomy [1]. Astronomy has always has been and is an observational science, yet has been enormously successful at creating models of what we see in the skies. Would you critique astronomy the same ways as economics? What is the critical difference? [1] Yes, there was a lot of simultaneous work in other areas as well.

What is the critical difference?

Economics is a dismal science and models rarely predict real word outcomes correctly. It’s more akin to astrology than astronomy.

Re: Danish government makes its new economic model open source

#114

Post by jbothma » Sat, Jan 22, 2022, 6:18 AM UTC

mbar84 wrote: post #89

zwaps wrote: post #85

Earlier quoted context omitted.

A representative sample features the same external validity issues you have in many (any) experiments, including in the hard sciences. That's part of science, and it would be unfair to attribute it otherwise. One experiment won't do it. As for your other point, I guess the issue the lack of a hypothesis regarding basic income. You can't test "basic income" as such, and with such unspecific setup you are sure to confl…

> Are you going to start by examining distributive effects? Really? Fair point. I guess you could run an experiment where money is simply taken away from people, destroyed and then look at the effect of that in isolation.

But... UBI doesn't destroy what might be taken away. That money immediately goes and does work, and eventually it potentially improves the environment of those it was taken from. In the form of fewer social issues. Is the theory anyway.

Re: Danish government makes its new economic model open source

#115

Post by Someone » Sat, Jan 22, 2022, 6:35 AM UTC

mbar84 wrote: post #77

charcircuit wrote: post #76

Earlier quoted context omitted.

>We can't do controlled experiments Why not?

Because people aren't lab mice. My favourite example are claims wrt. experiments for the Universal basic income. These experiments always pertain to people who receive more money than previously, but somehow never include a proportional group of people from whom the money is taken away. To do this experiment correctly, you would have to pick a random sample of the population and do the redistribution regardless of wh…

And lab mice aren’t elementary particles, even though inbreeding can make them extremely similar, DNA-wise. Even if they were, they aren’t humans, so extrapolating to them is an art in itself (physicists rarely do experiments with electrons and draw conclusions about neutrons from them)

That it is harder to draw conclusions from experiments in biology than in physics doesn’t imply biology isn’t a science. Economics adds the problem that we (rightfully) don’t want to do realistic controlled experiments (would at times be hard, too. Put a few million people in a country with a given law regime, watch for a couple of decades, draw conclusions. Repeat) but again, to me, that doesn’t imply it isn’t a science.

I think it’s more part of the humanities than a science, though.

Re: Danish government makes its new economic model open source

#116

Post by jhgb » Sat, Jan 22, 2022, 6:37 AM UTC

drran wrote: post #105

tomrod wrote: post #92

Earlier quoted context omitted.

Many, with the benefit of a prosperous economy and stable polity.

I'm not interested to pay 15k in taxes to receive 5k back as UBI, regardless of economy or stability. How much you plan to pay in taxes to support my UBI?

> regardless of economy or stability.

So you're saying that you're a poor economist, then.

Re: Danish government makes its new economic model open source

#117

Post by rixed » Sat, Jan 22, 2022, 6:58 AM UTC

What makes this model specific to Denmark, apart from the supplied baselines?

Also, is anyone aware if such large scale automatic optimisation solvers are used in other departments, such as crime regulation, health care, military?

Re: Danish government makes its new economic model open source

#118

Post by runeks » Sat, Jan 22, 2022, 7:06 AM UTC

abdullahkhalids wrote: post #112

mbar84 wrote: post #67

Economics is not a science like physics. We can't do controlled experiments, we can't falsify hypothesis. This leads to very muddy waters and what you are left with are two kinds of economists: Those who tell people what they want to hear and those nobody listens to. Econometrics gives people everything they want to hear, and with a scientific veneer as a bonus. The HN crowd should however appreciate how susceptible…

Please note that the origins of modern science in Europe lie in astronomy [1]. Astronomy has always has been and is an observational science, yet has been enormously successful at creating models of what we see in the skies. Would you critique astronomy the same ways as economics? What is the critical difference? [1] Yes, there was a lot of simultaneous work in other areas as well.

> What is the critical difference?

Whether the stuff you’re observing can read and understand your observations, and then choose to do the exact opposite.

Re: Danish government makes its new economic model open source

#119

Post by randomsilence » Sat, Jan 22, 2022, 7:13 AM UTC

MatthewMob wrote: post #110

mbar84 wrote: post #91

Earlier quoted context omitted.

UBI cannot be implemented unless somebody pays for it. It's necessarily redistributive. All existing experiments only look at one half of the equation. I think it's a fair question to ask what the effect will be on people who on net will pay more than before this system was introduced. Breaking peoples legs is not a prerequisite for others to run faster.

Of course not, there are a plethora of factors that would alter the effectiveness of UBI, looking at it so simply and then rejecting it outright is dishonest. Money would majorly come from those who have the greater means to pay larger amounts into the system, and on the hypothesis that bettering the material conditions of those in the lower and middle class will necessarily lead to increasing productivity and thus (…

You can use purchasing power parity differences to check it out. Find like-minded first world people to pool a fraction of their income and you can offer UBI to a third world village or town.

Re: Danish government makes its new economic model open source

#120

Post by cycomanic » Sat, Jan 22, 2022, 7:19 AM UTC

mbar84 wrote: post #88

zwaps wrote: post #83

Earlier quoted context omitted.

Economists do plenty of experiments. As for Econometrics, I agree that studies employing observational causal inference in statistics are much harder (and harder to swallow) than experiments. Usually. But perhaps, if you dig a bit deeper and ask yourself things like: "what makes a hypothesis falsifyable" or, "could there be a hypothesis falsifyable by observational data?". Have your ever written down the exact exclus…

I understand the argument and I accept the idea of natural experiments in principle. The most difficult thing with all of these is the ceteris paribus (holding all else constant), or as a second best, correcting for known confounding factors. This is in such stark contrast to a lab setting, where an adversarial scientist can regard a hypothesis as wrong and construct an experiment to prove it so, only to find out tha…

> The parts of economics that are valuable are not based on econometrics, but upon reasoning from first principles: Incentives, supply and demand, game theory etc. under which I would argue all of your examples fall.

So how do you confirm these first principles? I'd argue that those are an even wider door to let your biases flow into the analysis. I mean this type of argument has given us trickle down economics which has significant real world evidence it doesn't work.