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I just wanted to mention that your last few posts have been very nice. You have clearly worked on exposition, and it has paid off.
I became interested in this sequence after your first post on mathematical ability, and I'm glad to see you factoring your ideas into digestible pieces and writing them up.
What do you think of the health effects of too much sitting? That seems to be a hot topic recently. http://www.mayoclinic.org/sitting/expert-answers/faq-20058005
We think you're sick either because people get cancer, or they have 4 bodily humors which get imbalanced, or it's all due to malignant airs. We doctors haven't figured out which is the right paradigm, but rest assured as you die: probably one of the 3 paradigms is right!
There isn't this much disagreement over macro. Especially undergrad macro.
As I said originally: macro cannot agree on an explanation for any of the events I listed, and my examples fit your demand for examples.
And I explained how one could use the models taught in macro principles to think about each example.
Then it's not a theory capable of explaining the event at all.
Are you really claiming that a theory that restricts the possible causes of an event to three has not explained the event "at all"?
Under this definition, I agree that undergraduate macroeconomics cannot explain the real world. But surely this is a rather restrictive standard for "explanation"?
I would rather say that a theory that allows us to concentrate a lot of probability mass on Y upon observing an element in X, or to concentrate a lot of probability mass on X after observing an element in Y, is doing quite a bit of explanatory work!
If the state of the art...is that "there's no settled explanation" for Japan's Lost Decades...then how on earth could the simple models taught to undergraduates not have "huge problems" dealing with these "real world" events?
I don't see how this follows.
Suppose we teach a theory that says things in set X can be caused by things in set Y={A,B,C}. Then I say "there's substantial argument about whether major event x in X was caused by A or by B."
This does not mean the theory has "huge problems" dealing with real world events! It just lacks the power to distinguish between causes from within the set Y.
In the same way, economists argue about the causes of things like the Great Depression, Lost Decade, and Great Recession, but they mostly agree about the sort of causes they need to consider, and they have a common framework to think about them in (or at worst a few competing frameworks).
You demanded examples where macro does not work well in the real world. I named 4
I demanded examples of models taught to undergrads that have "huge problems dealing with the real world." The same poster went on to say that these models are so dangerously wrong one must be intellectually inoculated against them!
You've given several examples where our knowledge is incomplete. I agree! And I hope that any economist would explicitly say that there's no settled explanation for the Great Depression, or the Great Recession, or Japan's Lost Decade. But that is quite different from saying that the models we DO teach have "huge problems dealing with the real world" and "are NOT how the world works". I think the basic models ARE effective tools for understanding how the world works, and a good teacher will explain both their uses and their limitations.
In brief, the fact that there are things we don't know does not mean that what we do know is wrong, and a good principles class should teach both what we know, and what we don't.
Are complex macro models how the world actually works?
Nope! All models are huge simplifications.
What are our most successful macro models, and how successful have they been?
A controversial question!
The conventional approach in (academic) macro is to build (relatively) simple models that can match particular stylized facts. Thus we have lots of models that can predict certain patterns in the data, but don't pretend to explain everything. Some people think we shouldn't do anything beyond this! (See Caballero, Pretense of Knowledge Syndrome)
Other people do try to build models that can match all the data. A standard cite is Christiano, Eichbenbaum and Evans (2005), and for another approach see Smets and Wouters (2007) (they even call themselves Bayesians!).
Then there are macro forecasters who try to accurately predict the future using non-theoretical statistical models. An example of this would be the work of Frank Diebold at Penn. These models can do a lot better than the above at predicting future data absent changes in the policy regime, but are presumably less effective at predicting the effects of novel policies (see the Lucas Critique).
My own opinion is that if you want to predict the next data point, use a forecasting model, but if you want to know the effects of a new policy, your best bet is to rely on simple models plus judgement. Good economists know more than any model!
What do you mean by 'content' here? The basic narrative each model tells about the economy?
Right. Plus most undergrad models have an analog in grad macro, i.e. the AD-AS model and the New Keynesian model, or Quantity theory of money and a basic cash in advance model.
The big difference between the models I learned in undergrad and the models I learned in grad school was that in undergrad, everything was static. In grad school, the models were dynamic
True in general. Some intermediate macro courses use a two-period framework to explore basic dynamics. Williamson's textbook does this.
Lumifer said (1) the state macroeconomics as a whole is bad, (2) what you learn in a principles course is not how the world actually works, and (3) macro models have huge problems dealing with the real world. These are extreme claims, and I think I was justified in calling him on them.
To your examples -- the AD-AS model (or IS-LM in older textbooks) can be used to think about business cycles in general, and the liquidity trap in particular, which covers most of your examples. The Great Depression needs discussion of monetary policy (gold standard, Friedman-Schwartz, etc), and all of your examples need some discussion of financial crises, banking panics, and asset bubbles. Japan is not that mysterious once you consider demographics and per-capita growth rates.
A good principles class will spend quite a bit of time talking about each of your examples, and show how to think about them using the standard tools.
I would caution to be sceptical of undergrad-level economics, in particular macro. The usual models taught to students have huge problems dealing with the real world.
Name three.
I would say that undergrad and grad econ are very different methodologically (at least at most schools), but a lot of the content is the same.
Stephen Williamson's intermediate macro textbook tries to bring in a lot of grad-level models/concepts, albeit in a "toy" form.
It didn't occur to me either, but ironically it was the first thing my wife suggested when I told her about the marshmallow experiment yesterday (it came up in the context of that professor's comments about fat people, self control, and PhD programs recently). This post's timing was thus quite serendipitous.
It probably occurred to her because she is a doctor who works with primarily poor patients, many of whom are black and hispanic, and so is used to the associated mistrust when crossing cultural and socio-economic lines.
But this experiment ruled out the following:
- It doesn't matter if a child is more trusting; only self control affects how long they wait
I agree, but I don't think anyone believed that nothing else matters to marshmallow eating.
We have to distinguish between the propositions:
(P1) A significant fraction of the variance in marshmallow eating among children observed in past experiments is explained by trustingness.
(P2) Inducing large changes in trustingness in children produces changes in marshmallow eating behavior.
This study supports (P2), but it is only informative about (P1) to the extent someone previously assigned substantial probability mass to the proposition:
(P3) There is large variation in childrens' trustingness, but trustingness doesn't affect childrens' marshmallow eating decision.
I suspect most people didn't assign much probability to (P3), and so this study shouldn't change their opinion very much.
I really don't see how this casts doubt on the original experiment. Suppose we express a child's decision as maximizing expected reward minus the cost of waiting, where the latter takes "self control" as a parameter. If we lower expected reward, (nearly) all the kids eat the marshmallow. If we raise expected reward (by reinforcing waiting twice), about half the kids wait. But still, 6/14 kids in the second group didn't wait, so clearly there's variance from another source.
One way to tease out this connection might be to compare the kids who waited to the kids who tried to hold out and ate the marshmallow late (say after 10 minutes). Presumably the latter group trusted the adults, and their failure to wait was due to lack of self control. Now compare those two groups 10 years later.
Two-boxers think that decisions are things that can just fall out of the sky uncaused.
But don't LW one-boxers think that decision ALGORITHMS are things that can just fall out of the sky uncaused?
As an empirical matter, I don't think humans are psychologically capable of time-consistent decisions in all cases. For instance, TDT implies that one should one-box even in a version of Newcomb's in which one can SEE the content of the boxes. But would a human being really leave the other box behind, if the contents of the boxes were things they REALLY valued (like the lives of close friends), and they could actually see their contents? I think that would be hard for a human to do, even if ex ante they might wish to reprogram themselves to do so.
I'm going to make a meta-comment here.
I think that your ultimate goal should NOT be to convince your dad that you are right and he is wrong. If he eventually changes his mind, he's going to have to do that on his own. Debates just don't change participants' minds very often.
Instead, your goal should be to make him respect your beliefs as genuine.
Christians generally respect people who are genuinely seeking truth, in part because the Bible promises that "those who seek will find". The good news is that you ARE legitimately seeking truth, so you should be able to convince him of this.
Hopefully you already have a good relationship with your father based on mutual love and respect. You want to build on that and preserve it as much as possible. He is going to be your dad for the rest of your life, and how you interact with him now is going to determine in part how that relationship develops.
More practically: It sounds like you aren't sure exactly why you've changed your mind, and are having difficulty articulating it. Nobody on this site is going to be able to articulate it for you. Rationality is a method, not a conclusion. So here is my suggestion: do a stack-trace on your change of belief. It happened, so it is causally entangled with some set of arguments and evidence you encountered. Go back and try to figure out what caused you to change your mind. Reconstruct as best you can, in your own words, as exactly and precisely as possible, why you changed your mind.
This exercise will help you to understand what you believe and why. Discussing this with your father will be grounds for a future relationship based on mutual love and respect. That should be the goal here.
Last piece of advice: spend some time with your dad doing something other than arguing. Go to a baseball game or something. Try to get some father-son time where you're not just talking about your beliefs. You want him to get used to the fact that you're the same person, and you don't want this to dominate your relationship.
I imagine that if polls showed that we were in a situation where strategic voting might be useful for people with certain preferences, the news media would report on it and people would learn about it.
I can see the headline now: "Mathematician says that if your preferences are 'A > B > C', you should vote 'B > A > C' in November!"
Such situations could be recognized by poll questions like "What is your preference ordering over these 3 candidates?" Candidate B's campaign would have a large incentive to publicize this information.
In context: http://suntzusaid.com/book/4
I think the quote is an alternative translation of paragraph 15 in the link above:
"Thus it is that in war the victorious strategist only seeks battle after the victory has been won, whereas he who is destined to defeat first fights and afterwards looks for victory."
It has an associated commentary:
Ho Shih thus expounds the paradox: "In warfare, first lay plans which will ensure victory, and then lead your army to battle; if you will not begin with stratagem but rely on brute strength alone, victory will no longer be assured."
If you read it literally. I think Sun Tzu is talking about the benefit of planning.