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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. The attempted refutation of the Phillips curve 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.
Edit: clarification of strawman
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.
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.
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.
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
The real question is why we even bother discussing a curve which was pulled out of the ass of a man who went on to invent a hydralic computer to model the national economy of the United Kingdom. https://en.wikipedia.org/wiki/Phillips_Machine
I think his greatest achievement was to demonstrate the concept of being a really clever idiot.
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.
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.
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
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.
If it's an attempt at amogus, it sucks too
Economists are the priests of capitalism.
I have examined the ~~goat entrails~~ quarterly metrics and determined that ~~gods~~ markets require more ~~human sacrifices~~ corporate tax breaks
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 Nobel's death it is in a slightly different category.
Economics is a subset of moral philosophy, which just happens to care a lot about mathematics but is (or should be) nonetheless primarily concerned with questions of morality.
not sure i agree per se but im willing to hear more?
maybe you mean to distinguish between economics as a study and economics as a mode of policy