11–20 of 63 posts
The fact that the question is being asked about Economic Theory in a respectable, prominent magazine like National Affairs provides the answer.
When it comes to macro, it is pretty useless. See for example the polemic caused by this paper by Paul Romer, chief economist of the World Bank: https://paulromer.net/trouble-with-macroeconomics-update/
A flaw with current economics is that they expect the economy to grow exponentially while resources including energy are linear. That for me is a flaw can someone explain how that works? https://dothemath.ucsd.edu/2012/04/economist-meets-physicist... Then there is central banks which I think is a form of central planning. Most central planned system lack information that why they do not work. I argue production of go…
The amount of energy the world consumes to produce 1 unit of GDP declined by 32% between 1990 and 2015 [1]. Measuring macroeconomic material intensity is more complicated [2], but the core of your misconception derives from the subjectivity of value.
One way to make a car more valuable might be to make it twice as heavy. But another could be to make it a nicer color. Or give it better software. (Better being defined solely by price.) As our world becomes immaterial, the decoupling of material inputs and economic output makes sense. It also lays the ground for theoretically infinite economic growth. As long as peoples' utility is being increased the economy will grow.
[1] https://www.eia.gov/todayinenergy/detail.php?id=27032
[2] http://www.sciencedirect.com/science/article/pii/03014207859...
"There is a very real possibility that over the next 20 years academic economics will congeal into a discipline, like sociology today, which is definitively shaped by an ideologically driven point of view." That does not bode well for the future of the economy...
No respectable author would dare ask such a question about the effectiveness of, say, theoretical Physics, Computer Science, or the Theory of Evolution -- to name other bodies of theory familiar to general audiences. The fact that the question is being asked about Economic Theory in a respectable, prominent magazine like National Affairs provides the answer.
No respectable author would dare ask such a question about the effectiveness of, say, theoretical Physics, Computer Science, or the Theory of Evolution -- to name other bodies of theory familiar to general audiences. The fact that the question is being asked about Economic Theory in a respectable, prominent magazine like National Affairs provides the answer.
[1] https://newrepublic.com/article/112745/yuval-levin-rights-ne...
Interesting to note that the author tries to discredit Keynesian economics, but makes no mention of the Reinhart / Rogoff debacle that completely undermined their paper which purported to show a link between debt and growth - a paper much referenced by people like the author of the article who are primarily interested in using economics as a fig leaf for their ideology.
For the record, I trained in politics and economics.
We know that there aren't any countries which rose to first world status without judicious application of tariffs, subsidies or currency manipulation.
Effective at what? A rather savvy economic-statistician once told me that economic theory is a very effective way to determine who has been able to get their theory published.
Discussions like this always seem a little strange. Sure, they're important, but taken out of context they're counterproductive and even harmful. This is the problem: what is the alternative? The pet theory of a madman or sociopath? The difficult truth is that everyone has an economic theory, whether they admit it or not. The question is, whose theories do we want to pay attention to? People who spend their lives arg…
Regarding economics, there are some fundamental assumptions that are often criticized.
For instance, in the mid 1700s, Charles Townsend asserted the fundamental laws of economics were these: 1,) Man's want, wishes, needs and desires are infinite. 2.) Resources are finite.
But numerous anthropologists have criticized these assumptions. Margaret Mead didn't see the tendency towards infinite consumption among the tribes she studied. And see Marshall Sahlins book Stone Age Economics -- he doesn't see any evidence of infinite desires among the tribes he studies. Thus it appears Townsend's assumptions are fit only for a society in the middle of the Industrial Revolution. So his "laws" are not "laws" in the same way that Issac Newton could describe "Laws Of Motion". Rather, Townsend's laws were a convenient assumption for a certain kind of society, but then the question comes up constantly, are we still the same kind of society?
Another example, Joseph Schumpeter starts one of his books (I think Das wesen und der hauptinhalt der theoretischen nationalökonomie, 1908) "The social process is one indivisble whole! However, to make useful remarks regarding production and consumption, it is reasonable to pluck from experience those transactions that are altogether economic in nature."
There are many people who strongly agree with the first sentence and therefore they can not agree with the second sentence.
I could go on, but I don't have the time.
If you go looking, you'll find many examples. In physics, no one doubts that matter and energy are real things, but in economics, it is the most fundamental assumptions of the discipline that have always been under attack.