@til Today I learned that the Austrian School of Economics, on which our current economic models are based, is not itself based on empiricism and in fact argues that it should not be based on empiric studies at all but on thought experiments. https://en.wikipedia.org/wiki/Praxeology#Austrian_economics
If the Austrians were right, the USD would have collapsed due to Pandemic money printing. I was one of the people who didn’t have a degree in economics and was sure the Austrians were right. I was wrong and made a lot of investments that failed spectacularly.
Austrians are economists who 100% know the correct model. And it doesn’t matter what stupid reality does.
It might not have fully collapsed (yet), but I think all the money printing had a lot to do with the subsequent relative price boom of various assets. For instance if you had bought gold and waited a few years it would have worked out pretty well. Inflation relative to stores of wealth has been a lot higher than inflation relative to consumer goods.
Been hearing that for 20 years since the GFC
Hint: if your economic theory makes a prediction but has no time horizon, then it has NO PREDICTIVE POWER
Edit: retroactive price predictions, be they in gold bitcoin or beanie babies, also is spectacularly unimpressive for an economic theory