Discussion Tuesday

Criticising broad economics for measuring and discussing issues on the basis that macro forecasts predictions are inaccurate is equivalent to criticising climate science because weather forecasting is inaccurate.

Note:

https://twitter.com/neurobonkers/status/422097747563409408/photo/1

  • MillAhab

    Matt thought you would enjoy this from Robert Skidelsky:

    http://www.project-syndicate.org/commentary/robert-skidelsky-shows-what-is-at-stake-when-we-apply-economic-logic-to-our-personal-lives

    Also with the topic of wages/income in the news alongside NZ’s supposed “Rock-Star-Economy” status I was hoping you (or anyone else out there Econ cyber-land) may be able to help with the following:

    The OECD recently did some analysis on the % of income/wealth in each country that is attributable to labour and what is attributable to capital (I can’t find it online). Treasury also does these calculations I believe, and the split in NZ is something like (approx) 60% to capital and 40% to labour. Apparently only Mexico, Turkey and the Slovak republic have less going to labour than NZ.

    Why is this? Is it because the base of our economy is primarily farming/Auckland property speculation etc.? Is it because we don’t tax gains on capital and as a result more activity flows to that side of the ledger? (Tax distortions, dead-weight-losses etc. etc.)

    I would really love to know if you are able to share any thoughts! :)

    • http://tvhe.co.nz/ Matt Nolan

      It looks to me that Skidelsky is attacking lazy economics – there is a definite temptation to equate labour supply and money to welfare, while ignoring the disutility of work, and the relation of policy to non-pecuniary matters. Actual normative/policy analysis shouldn’t – and often doesn’t – do this.

      I hadn’t seen the OECD bit, do you have a link? Would love to have a look and give you my thoughts.

  • Luc Hansen

    Or because Al Gore is making a profit out of doing humans a favour?

    http://pc.blogspot.co.nz/2014/01/councils-experts-among-last-still.html

    Funny thing is, one could be forgiven for assuming that people of the ilk of Cresswell would admire Gore’s enterprise!

    By the way, I only happened upon the above because Eric, amazingly, reposted the rubbish, here:

    http://offsettingbehaviour.blogspot.co.nz/2014/01/flood-risk.html

    • http://tvhe.co.nz/ Matt Nolan

      Global warming stuff is complicated, I just wanted to use the analogy :)

  • http://www.tvhe.co.nz/ jamesz

    I like the analogy. So how seriously should we take climate change predictions? No doubt the historical explanations are pretty good but does that mean the forecasts are any good at all?

    • http://tvhe.co.nz/ Matt Nolan

      I like the analogy as it can be seen as cutting both ways as well – the key thing is that often those most dismissive of economics are the most supportive of climate science. Given the similarities in methodological issues (with the added complication in economics that we have forward looking agents), the fact people are willing to appeal to authority on climate but not economics is fascinating!

      • http://www.tvhe.co.nz/ jamesz

        I appeal to economic authority at least five times every day!

  • Kimble

    … is equivalent to criticising climate change skepticism because the weather is bad.

    ^^^^^
    I have seen much more of this than the other.

    • http://tvhe.co.nz/ Matt Nolan

      I’m not really focusing on climate change here – I’m looking into an analogy that compares it to economics.

      It would appear more consistent to be either skeptical of both or supportive of both – but I often find that this is not the case!

  • Ridwan

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