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The second graph is a fucking terrible graph as none of the data points correlate with a specific time which would be needed to make a proper comparison to the graph on the left.
If you thought this made sense you are mistaken. OP likely knows fuckall about economics
If it’s an attempt at amogus, it sucks too
first if all rude, downvoted and blocked.
second of all, the graph on the left doesn’t show time either. or technically it does, both do, because they are enrapped in the rate axis (which is change over time).
third of all it’s a meme. stupid idiot OP’s opinion is that economics has historically been used as a tool to oppress and that overly simplified expressions of the economy bolster the manufactured consent for that oppression.
you’re just confused and angry tho so chill.
They weren’t talking about YOU.
eh fair enough. i rarely come on here tho and i like just chatting not getting into toxicity even a little anymore. apologies to the other user if u see this i just get so much toxicity on this site that i have to exit conversations early.
OP is the 4chan OP not you
Alright, why do we need the timestamp on the second graph? They appear to show the same axes and the first graph makes no mention of time-dependence.
I agree economics is not a science. But using a line chart is just dishonest and so is cropping data so that it shows only a stagflation period. There is a reason it has a special name.
it’s not a technically perfect 4chan post ill give you that. i agree with the sentiment though, given other experiences i have listed in these comments :)
I don’t know the answer to this question: have we been in stagflation for the last 50 years? Because cropping data points is a great way to distort the picture, but I counted somewhere over 40 points before I lost the point.
Not quite, stagflation requires both high inflation and unemployment which we did see concurrently during COVID.
But it also needs low or negative economic growth which again we did see during COVID but growth and employment have been up so we haven’t had a long period of stagflation.
The final key thing that I don’t think is technically required is that the fed can’t lower rates to drive growth because inflation is too high hence the economy gets stuck. It feels like this could be where we are heading but haven’t quite been in a prolonged enough period to qualify for yet.
Economics is a classic form of divination, like astrology or tarot, and its purpose is the same - to provide oracles who will serve the monarch and tell him that the things he wants will happen and the things he doesn’t will not.
Economics is best understood as a priesthood, similar in purpose to haruspicy. Once you make that mental adjustment, everything they do, the types of employment they get, the vile drippings they emit, it all makes horrible, horrible sense.
Economists are the priests of capitalism.
I have examined the
goat entrailsquarterly metrics and determined thatgodsmarkets require morehuman sacrificescorporate tax breaks
Economics is a historically flawed and ideological science. But I think it’s getting better and more empirical with time. The scientific method works, economists just have the come down from their high horses and actually follow the data.
based. and it’s a weird situation because economists deal with money and money corrupts so there are fallible incentives. just see how trump awarded arthur laffer for his negligible contribution just because his model was convenient for rich people: https://www.washingtonpost.com/politics/trump-to-award-presidential-medal-of-freedom-to-economist-art-laffer-today/2019/06/19/f1505826-9299-11e9-aadb-74e6b2b46f6a_story.html
That’s easy to say when your mortgage doesn’t depend on the Emperor’s New Clothes being real. Many if not most economists have staked their reputations and networks on pre-empiricism economics.
It’s not a simple matter of “whoops I was wrong about one thing”. Since the 1970s we’ve turned the world economy upside-down to cater to billionaires and inequality has skyrocketed. It would be like a priest admitting he reassigned molesters for decades.
OK but you can’t treat economists as a monolith. If you want to shame the people who did that then go ahead, but I think there’s a newer group of economists who are deconstructing the propaganda and seeking truth, and they should be encouraged.
ok I checked the comments on this because I thought we were gonna start analysing the actual stuff in the graphs or something and now everyone’s yapping about how economists are all evil or something
this is gonna get mass downvoted and I don’t care
Seriously the second graph is garbage and it makes no sense to compare it to the claims of the Phillips curve.
Also the Phillips curve is a two variable snapshot from a multi variate world (iow a simplification so freshmen can understand). The right hand graph is clearly not holding the other non graphed variables constant, hence you don’t get anything useful.
Economics as taught below PhD level is about simplifying down concepts to make a complex system understandable.
Phillips curve says that as unemployment gets worse the ability of suppliers to raise prices gets weaker because consumers have less money.
Of course consumer demand is only one facet of inflation, there’s a whole system of variables there.
And as someone below the Phd level that was always my understanding.
You don’t see the clusterfuck of a graph on the right?
The analysis is that there’s is no correlation. It’s an excuse for economists to push whatever is best for their self interests. You saw the analysis and didn’t like it. If you see something different, please share. You’re part of “the comments”.
The graph on the right only shows that more variables impact unemployment than just interest rates alone, which you obviously know. It doesn’t prove or disprove the model on the left, which is a pretty simplified relationship. Monetary policy, like adjusting interest rates, was demonstrated to be quite effective just recently with the Fed successfully keeping inflation and employment under control with these tools over the past few years.
Come on! Get with it! Dogma over debate! Why aren’t you letting yourself be whipped into a blind frenzy?
hmm i value your perspective—i think you’re just outside the popular narrative and that’s alright.
no one here believes economists are evil per se. what i and others are expressing with that language is that economists have been employed to justify oppression through malicious misuse of their perceived authority. some have been active bad actors, while many more are just pawns or unwitting mouthpieces for the funneling of wealth into the top 0.1%
Inflation isn’t just a function of unemployment. Unemployment isn’t just a function of inflation.
It could be that with all else held constant, plotting the two against each other would give a similar curve to the left. Or it could be that the curve on the left was presented as an oversimplification of the big picture to manipulate policy or political will.
From my pov, the ratio of money supply minus savings to goods/services supply is the biggest factor for inflation, though there’s a time lag and prices are sticky downward.
Focusing on money supply misses the most significant factor in inflation, missed by all armchair economists- the private banking system.
A $1 million asset is not part of the money supply, if it’s value increases to $2 million it has no impact on inflation.
If the owner of that asset then aquires a loan against that asset and spends that money, they have increased the money in circulation. That is a far more significant driver of inflation than government spending. Meanwhile the FED (or equivalent) has not printed one additional dollar.
These models don’t work because they ignore the MOST significant driver of inflation
These models don’t work because they ignore the MOST significant driver of inflation
Wellll… they work just fine for their intended purpose - demonstrate the correlation between 2 variables in an understandable way.
What you are (correctly) referencing is that there is a much more complex system in reality than the simplified model - they literally exist to try and explain difficult concepts in digestible ways. Everyone’s eyes glaze over if you try to do the "if this, then that, but if this then the other (at 45 variables level).
So yes, inflation is wildly more complex than just money supply or demand push inflation (the flavour the Phillips curve is looking at).
But the people in this thread bitching about economists dumbing stuff down so they can understand it resulting in simplistic models that don’t reflect the real world would be just as quick to bitch about how they’re in an ivory tower because they refuse to explain things in laymans terms.
Damned if you do, damned if you don’t.
What’s the loan money in your example if it’s not an increase of the money supply?
There is more to economics than Milton Friedman. Marx was a pioneer in economics and leftest theory has been robust in the field from the beginning.
Criticizing soft sciences for their estrangement from mathematics is classic antiintellectualism. The same logic would demand the disillusion of psychology, sociology, and all the critical theories that are the foundation of modern leftest thought.
You miss the point that the soft sciences are being used as an excuse for bad policy. If the soft sciences informed a model for good policy this post wouldn’t exist but instead we have the Laffer curve and trickle down economics.
No one here is calling for a disillusion of economics. It just needs to be used appropriately instead of as a voodoo magic to transfer wealth upwards.
Anti-intellectualism on Lemmy, it must be a day ending in y.
Calling well-earned criticism of economics anti-intellectualism is using the composition/division fallacy.
Most people’s lives have been affected for decades by Chicago School of Economics voodoo nonsense, that’s where much modern criticism is aimed.
• https://en.wikipedia.org/wiki/Growth_in_a_Time_of_Debt
• https://www.theguardian.com/news/2017/jul/11/how-economics-became-a-religion
And Jesus fucking Christ, the number of people in here who speak like economics is a field united behind Austrian economics is fucking bizarre.
A lot of macroeconomics in particular seems to follow aristotlian thinking, i.e. you can just logic your way from step to step. It is interesting in that pure mathematics does work this way in that you can start with a bunch of axioms/definitions and combine them and work with them until you reach a conclusion without any need for experimentation. For example, you don’t need to measure a bunch of triangles to show that the Pythagorean theorem is true.
The way i was taught macroeconomics in school, it takes the mathematical approach of starting with a list of assumptions that seem to be true, and using mathematical logic to derive conclusions. The trouble is that: 1) many starting assumptions aren’t as true as you’d think, and 2) many of the “logical” steps also aren’t as logical as you’d think.
Supply and demand is an easy example. The classic idea is that as supply goes up, price goes down, and vice versa, while as price goes up, demand goes down. The existence of Veblen goods (i.e., things that people want because they are expensive) shows that the demand part isn’t right.
None of this would be a problem if it was just an intellectual exercise to help develop hypotheses for use with more sound scientific methods, but it’s used for policy directly.
Beautifully expressed translation of this meme, thank you!
Economists refuse to accept that their subject is really just sociology. They like to imagine it being like physics, where study of reality leads to underlying mathematical truths to extrapolate from. Not a big messy subject where you can’t be certain of anything.
What makes it even more freaky is that many of the subjects being studied know they are playing a game. So in many ways economy is more like the evolving metagame of competitive sports, where hardcore nerds constantly try to game the system and outplay each other, and what was a solid strategy last month doesn’t work anymore, even if the rules are the same.
“Econ 101” is just that and if you think it’s representative of “economists” you’re dunning-krugering.
There are a lot of very competent interdisciplinary socio-economic scientists. The problem is that no-one listens to them because everyone still has the hots for the ghost of fucking Milton Friedman and trickle-down raeganomics.
Populist ideologues will always promote simple economic models, that’s not the economists’ fault. Sociologists can tell you why bad economic policy is self-sustaining under democratic capitalism but they can’t really do anything about it because no one asks for their opinion.
Hell, right now the US is ruled by a moron whose understanding of economics is so bad that even the most hard-line libertarian economists are saying “you wot m8”.
Yeah, I think the problem is that the Chicago School is to economics what Freud is to psychology. Despite a century of progress since Freud, pop psych is still all based on him. The difference is that those in charge of policy don’t derive any benefit from applying Freud to mental health policy the way that they might derive a benefit from applying Friedman to economic policy.
When learning about options and future markets, one of the axioms is that no indivial have the power to move the move the market on any direction. But that’s just bullshit when people with enough money and power like Buffet, Elon or Trump can play the market and fuck up all your fancy mathematics.
Well tbf we cant make a replica of a national economy in lab and run experiments on it. We only have mathematical models
One would think this limitation would give economists some humility when finding conflict with other fields, but it seems quite the opposite.
No, but you can examine historical conditions with largely similar situations aside from the variable you’re studying. And you can do more limited experiments without emulating a national economy.
You can also look at “artificial” economies in games like EVE Online; I seem to recall a few economics papers coming from behavior seen there.
Yeah i try to do when explaining anything aboit economics to people. No one beloves that because it happen elsewhere is would happen here. Even something simple as lower inflation by rising interest rates.
Only tangentially related, but it’s often accepted that there is no Nobel prize in economics. There is a Nobel memorial prize in economics (link), but as it was set up after Noble’s death it is in a slightly different category.
Economics is a faith-based sham with an overlay of mathematics to give it substance. It should only be taught along with other bogus fields in schools of theology.
If I hear one more “Economist say” or “Economics warn”
Y’all still owe me 2008 and after. And every outlet repeat what those “economist” say just put gas on the fire and accelerate what they “predict”.
Apart from a cluster at the top I see a bit of a curve. Not much.
Economics and psychology will always be inherently fuzzy because of the whole free will thing.
Hmm sounds like a grad student really trying to make their data say something so they can graduate and finally start the life long process of paying back student loans.
Going off what I recall from econ 101 decades ago, the graph on the right violates ceteris paribus: it looks like a historical plot of inflation rate with unemployment rate. Looks like a strawman.
Other sciences would also be unsurprised their models don’t model longitudinal observations that fail to control other variables over time.
Nope you are misreading the situation. Both graphs show the inflation rate with unemployment rate, aka https://en.m.wikipedia.org/wiki/Phillips_curve.
If the charts were of different data axes it would be a different story but my understanding is this is not a strawman. But I don’t blame your investigation—there’s a lot of money out there trying to convince us that economics is simple actually.
The graph on the left demonstrates how employment rate influences inflation (and vice versa). The graph on the right is a historical account of inflation and unemployment in the US, which is not the same thing.
The graph on the right is subject to a lot more variables. The one on the left is also a simplified model. It’s not really one to one.
ah. it seems like you are getting the point 100% while maintaining that we disagree for some reason. :) im 100% with you and ill leave it at that
Nope you are misreading the situation. Both graphs show the inflation rate with unemployment rate,
Don’t believe I am, and I wrote the same. Please read it carefully.
If the charts were of different data axes
Didn’t suggest this either.
The plot on the right states in US, 1970s onward, ie, different points in time. Sure, inflation rate & unemployment rate changed in the US over time. Do you know what else changed in the US over time? Absolutely anything.
Scientific prediction requires control: it cannot make accurate predictions when relevant variables are left uncontrolled. Take for instance the ideal gas law. When temperature is constant, we can reasonably predict volume & pressure to vary inversely for ideal gases. If temperature is at least known, then we can still make a prediction (a function of temperature). However, if temperature is uncontrolled, no prediction is possible. Models only fit the conditions they’re designed to model.
As mentioned before, economic models typically expect ceteris paribus (all other relevant variables held constant). The article you linked states the Phillips curve models economy only in the short-run. The US economy over a span of years doesn’t satisfy any of those conditions. Therefore, the model doesn’t apply.
Attempting to refute a model by applying it to situations it doesn’t claim to model is a strawman.
ah there’s your confusion. i am not and no one here is refuting the model. we are criticizing how that simplified model is abused without considering the other variables and applied to policy-making. does that make sense?
i think we agree, if the above reframes the post for you :)
we are criticizing how that simplified model is abused without considering the other variables and applied to policy-making. does that make sense?
That indeed makes more sense: it only fits short-run predictions. It justifies short-run policies.
Longer term policies need a different justification: you’re definitely right there.
I think economists have a name for mistaking short- & long-run effects (something to do with equilibrium), but the course was too long ago for me to recall.
