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Danish government makes its new economic model open source

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Re: Danish government makes its new economic model open source

#121

Post by cycomanic »

mbar84 wrote: post #91
nautilius wrote: post #80

Earlier quoted context omitted.

So, if you would want to test if, say, a pair of shoes improves running performance, it's not enough to compare to peers without change, or the situation before the new shoes, but you will reject the study unless you also have a third group where you break people's legs? How would that be necessary?

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.

Isn't the typical first principles argument that lowering taxes for the companies etc. pays for itself because of increased economic activity and thus tax income actually increases. Why could the same not apply for UBI?

Re: Danish government makes its new economic model open source

#122

Post by gtsop »

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…

> Economics is not a science like physics.

It's not that economics can't be a science like physics. It's that (most) economists don't treat it like a science.

Re: Danish government makes its new economic model open source

#123

Post by maxlybbert »

em500 wrote: post #13

Note that the model is implemented in GAMS[1], a proprietary language focused at constrained optimization problems (think Matlab, but more niche). This makes it a non-starter for most interested outsiders. [1] https://en.wikipedia.org/wiki/General_Algebraic_Modeling_Sys...

The New York Federal Reserve has a model in Julia at https://github.com/FRBNY-DSGE .

The Federal Reserve has two models ( https://www.federalreserve.gov/econres/us-models-about.htm and https://www.federalreserve.gov/econres/edo-models-about.htm ), written in EViews and Dynare, respectively.

Re: Danish government makes its new economic model open source

#124

Post by stkdump »

gtsop wrote: post #122
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…

> Economics is not a science like physics. It's not that economics can't be a science like physics. It's that (most) economists don't treat it like a science.

I think the problem is that economics needs to take human behavior into account, which it tries to do via game theory, which in turn relies on rational actors. I don't think individual human behavior is predictable like that. You could argue that we don't need to model individuals, only large groups of people. But the problem is that often the behavior of some individuals has a huge effect on large groups.

Contrast that to physics, where we have been very successful with predicting the behavior of masses both on small and on large scale, with relatively few exceptions.

Re: Danish government makes its new economic model open source

#125

Post by stkdump »

throwawayboise wrote: post #49
sshine wrote: post #46

Earlier quoted context omitted.

Do you mean the Turkiye government? ;) (Reference to the recent news item that Erdogan made a public statement in which he renamed Turkey to Turkiye in English.)

Do countries get to declare how their names are spelled in other languages?

I think a country at least gets to decide what it calls itself in english. For example in official documents that they translate to english. Or what they teach in schools as the 'correct spelling'. Now if the rest of the world follows that is another question. Languages don't have owners.

Re: Danish government makes its new economic model open source

#126

Post by hgomersall »

cycomanic wrote: post #120
mbar84 wrote: post #88

Earlier quoted context omitted.

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…

It's worse than that, not only are the first principles demonstrably flawed, the towering edifice built on top fails due to some very iffy analysis. It's remarkable how much time and effort goes into attempting to maintain the idea of equilibrium in economics. You can only add so many epicycles before you should perhaps consider your model is wrong.

Re: Danish government makes its new economic model open source

#127

Post by lordnacho »

I've yet to read a comment about how well such models predict reality. Who is going to weigh in?

I studied economics, and I have some doubts about whether this kind of modelling works well enough to be useful. There's statistical issues like whether you have enough data to bring in your error bars, and theoretical issues like whether the thing you're studying moved below you because it's being studied. Neither of which invalidate the model entirely, but both of which make it a heck of a hard task.

And in the end, what matters is whether it works or not. The Lagrangian for quantum physics is some huge formula that gets pushed as meme now and again but it works. Likewise f = ma works perfectly well for your high school rolling ball experiment.

Re: Danish government makes its new economic model open source

#128

Post by jollybean »

viztor wrote: post #108

I read the comment about the unreliability of economics, however I do like to point one thing, most economical model fit well when the economy is doing ok or within a certain range of parameters, until something outside of those safe area happens. Think of 2008, and think of the economical impact of the pandemic. It's impossible to account for in prior models and thoughts as those are nonlinear events almost no one c…

It's a bit backwards looking in that it can assess known quantities.

But far beyond 'Black Swan' events it's hard to account for innovations, geopolitical shifts, things that change the dynamic.

Plastics, the dishwasher, women in Engineering and the workplace, the birth-control pill and Rock and Roll combined to shift things in ways we could not put down in math, at least beforehand.

But the biggest 'black hole' is that it does not account for consumer surplus: we only measure what is bought and sold, at that price. We don't measure the leverage gained by consumers for cheap fashion, the benefits of more variety in goods, more vacation, shifting to bikes from cars etc..

The data is still a beneficial area of study however.

Re: Danish government makes its new economic model open source

#129

Post by esarbe »

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?

- Astronomers cannot influence the system they are describing; there's no feedback. In economics there is.

- Astronomy describes systems with a few, simple particles whose inner state is not relevant to the behavior at large. Economics describes (tries to..) systems with many complex 'particles' whose inner state is essential to the behavior at large.

Not saying that this is what's fundamentally separates astronomy from economics, just pointing out some potential differences.

Re: Danish government makes its new economic model open source

#130

Post by [deleted] »

zwaps wrote: post #83
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…

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…

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