Comments on: Should economists be “imagineers” of our future?

By: bjornbutton

bjornbutton — Wed, 16 May 2012 15:46:31 +0000

I usually don't listen to economists for financial information. I go with my outsourced cfo services for information on my industry. Every industry is effected differently in a downturn.

By: DrJJJJ

DrJJJJ — Wed, 16 Nov 2011 16:02:47 +0000

Too many economist coming from our school systems which are brain washing machines for the far left! Europe is a great example of what happens to folks that embrace essential socialist doctrine-sounds good, but it doesn’t work in the long run! What we do with our time and money says everything about us as a Nation!

By: metahuman

metahuman — Wed, 16 Nov 2011 00:06:10 +0000

Prediction models are as good as their underlying assumptions and initial parameters. Now, the economies are non-localized and interdependent. In other words, separation between the consumer and consumption is no more static but dynamic one. Business transformation are occurring more rapidly than before. The digital economy has taken the front seat while the economist are still looking for answer in the hard data with help of classical models. Economist are more doing an analyst job with short term objectives otherwise long term trend must have predicted the financial crisis.

Engineers adopt and evolve. No offence to the economist but they tend to believe largely on the linear models with static variable for the long term trends. Also, economics, also a science, has yet to address the global amorphism.

By: OneOfTheSheep

OneOfTheSheep — Tue, 15 Nov 2011 22:13:15 +0000

I think this economist “gets it”.

Human beings are incredibly inventive and hard to predict in terms of what they will do when threatened. In fact nothing will ever predict every possibility, but trends will emerge over time as hindsight studies what happens even as we proceed forward with every tick of the clock into the unknown.

No one can be faulted for not “seeing” the results of every-rising wage expectations and the globalization of commerce, where countless millions of third-world workers suddenly became available as an alternative to American and European manufacturers. The economics of automation is an increasing factor affecting what unskilled, repetitive labor will be “worth” in the long term.

Just as in the “Industrial Revolution” lives and entire societies are being changed, like it or not. There is always good and bad in change, and when the “good” benefits the affluent and is adverse to those on the bottom of the economic pile there is societal challenge.

But what is “bad” for the American “middle class” has been good for ordinary citizens of Europe, Japan, and the advancing societies of Asia. Everything is relative, depending on who’s ox is being gored ;

By: wrylyfox

wrylyfox — Tue, 15 Nov 2011 20:52:50 +0000

Let’s zoom back some more. Engineers design things that work. Robots, automatic controls, and computers for example. Automatic control systems that run entire factories and advanced autopilots that can take off and land the airplane. There is a whole branch of engineering called systems engineering that the military and NASA uses to basically invent a new “thing that works” from just a set of functional requirements of what the thing is wanted to do. I see no conflict at all with that kind of engineering thinking and economics that would also design something that works.

By: Moopheus

Moopheus — Tue, 15 Nov 2011 19:13:42 +0000

“As noted above, what makes economics different from engineering is that people can respond to changes in their environment.”

Um, no. What makes engineering different from economics is that engineers test their models against reality and try to improve them if they fail. When systems do fail (and they will–economists always seem surprised by that) they’re examined for weaknesses and corrected. Admittedly, engineering as a practice can be subject to the same failings as others–buildings and bridges fail because someone cheated, cut corners, got lazy. People get hurt, cheaters get punished.

I mean, if you saw a bridge with a sign, “this bridge tested according to the best practices of economics!” would you drive across? I know I wouldn’t.

By: PabloB

PabloB — Mon, 14 Nov 2011 23:58:08 +0000

One further point :

Maybe we all suffer from Optimism Bias ? Since when have most models predicted a darker future ?

Moreover, it may be alright to show a short-term downturn. But in the medium to longer term, things will always turn around.

Maybe Macawberism is alive and well in Science and in Economics ? But only with caveats in Climate Science !

By: PabloB

PabloB — Mon, 14 Nov 2011 23:51:27 +0000

We will always be prey – now and for the foreseeable future – to Irrational Expectations and to External Shocks. The former lull us into a false sense of security – thinking we know it all. The latter are the cold water baths reminding us 20/20 vision is only Hindsight. Not sure this will ever change ?