Tuesday, May 3, 2011


Via Twenty-Cent Paradigms, three links from DeLong.

From A People’s Economics by Robert J. Shiller:

So, why is the public buying more books by professional economists?

The most interesting explanation I heard was that economics has become more interesting, because it no longer seems to be a finished and closed discipline. It is no fun to read a book or article that says that economic forecasting is best left to computer models that you, the general reader, would need a Ph.D. to understand.

And, in truth, the public is right: while there is a somewhat scientific basis for these models, they can go spectacularly wrong. Sometimes we need to turn off autopilot and think for ourselves, and when a crisis occurs, use our best human intellect.

No, Robert: "And when a crisis occurs." No.

My god. The task is to understand the economy. Not to wait for a crisis. And not to understand how to input data into a model.

The economy is the model.

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