2023 Nobel Prize in economics awarded to Claudia Goldin

* https://en.wikipedia.org/wiki/Eddington_experiment

Einstein's models made a prediction, people 'tested' that prediction in Nature, and it turned out accurate. General theory has made other predictions, and empirical observations have found them to be accurate as well.

Plenty of "real" science is/was done outside of controlled experiments in a lab.

A phenomena was going to happen (e.g., tax law changes): some economic models predicted X would happen, and some predicted Y would. We can see which were more accurate and which were falsified:

* https://en.wikipedia.org/wiki/Kansas_experiment

Rotterdam is running an experiment right now with regards to real estate markets and regulation:

* https://www.youtube.com/watch?v=BRqZBuu_Ers

* https://www.dutchnews.nl/2023/06/buy-to-let-ban-is-good-for-...

Every time the Federal Reserve makes a policy change there are people running their models on what will happen, and if their models are right they make a lot of money, and if they're wrong they lose a lot of money:

> But why was Gross betting so heavily against Treasuries? Brad DeLong tries to rationalize[1] Gross’s behavior in terms of a coherent story about an impending U.S. recovery, which would lift us out of the liquidity trap. But Gross wasn’t saying anything like that. Instead, he was claiming that the Fed’s asset purchases — QE2 — were holding rates down, and warned that the impending spike in rates when QE2 ended would derail recovery.

> So why did he believe all that? It all comes down, I’d argue, to liquidity trap denial.

> Since 2008 the basic logic of the economic situation has been that the private sector is trying to run a huge surplus, and the public sector isn’t willing to run a corresponding deficit. The result is an economy awash in desired savings with nowhere to go. This in turn means that budget deficits aren’t competing with private borrowing, and therefore need not drive up interest rates. This isn’t hindsight; it’s what I and others have been saying since the very beginning[2].

* https://archive.nytimes.com/krugman.blogs.nytimes.com/2014/0...

If people don't want to bother accepting the results of these experiments and continue following models for reason other than accuracy, that's hardly the fault of the field of study. See the movie Behind the Curve on folks doing perfectly valid experiments and completely ignoring the results:

* https://en.wikipedia.org/wiki/Behind_the_Curve

Clip (ensure unmuted):

* https://old.reddit.com/r/facepalm/comments/sjeoqd/flatearthe...

* https://twitter.com/Rainmaker1973/status/1559907302483935237

I'm not an engineer. I am a subject matter expert employed as a generalist.

Milton Friedman said "Truly important and significant hypotheses will be found to have 'assumptions' that are wildly inaccurate descriptive representations of reality, and, in general, the more significant the theory, the more unrealistic the assumptions."

Claudia Goldin and Cecilia Rouse:

> Although some of our estimates have large standard errors and there is one persistent effect in the opposite direction, the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras.

> …

> The weight of the evidence, however, is what we find most persuasive and what we have emphasized. The point estimates, moreover, are almost all economically significant.

Andrew Gelman:

> This is not very impressive at all. Some fine words but the punchline seems to be that the data are too noisy to form any strong conclusions. And the bit about the point estimates being “economically significant”—that doesn’t mean anything at all. That’s just what you get when you have a small sample and noisy data, you get noisy estimates so you can get big numbers.