If you are not happy with the results below please do another search
We’ve written a lot previously about cigarette taxes as a precommitment device that can increase welfare. However, while those models fit the stylised facts, it’s hard to know for sure if people are better off. For that you’d need to make a prediction about their increase in subjective wellbeing and test it. Now a couple […]
Simon Nixon has a provocative article in the WSJ where he argues that the current generation of New Keynesian models are useless because of their poor forecast performance. He proposes looking solely at the rate of debt reduction when forecasting economic performance: [The] dismal science’s [forecasting] record suggests is that there is something profoundly wrong […]
Writing in the FT he says: I think forecasting in a complex world is a poor test of expertise because luck is the overwhelming success factor. … The wonderful thing about a forecast is that both the forecaster and his audience feel that something profound has been expressed. And nobody will remember the forecast anyway. […]
Apparently some historians want their discipline to become a predictive science. Because that worked out so well for economics back in the 60s. What is needed is a systematic application of the scientific method to history: verbal theories should be translated into mathematical models, precise predictions derived, and then rigorously tested on empirical material. In […]
Tyler Cowen and Kevin Grier make some predictions: Medal totals will become more diversified over time. The market share of the “top 10” countries will continue to fall (it was 81 percent in 1988) as economic and population growth slows in the rich world. The developing world has greater room for rapid economic growth, and […]
Paul Krugman explaining the IS-LM model: [T]he first thing you need to know is that there are multiple correct ways of explaining IS-LM. That’s because it’s a model of several interacting markets, and you can enter from multiple directions, any one of which is a valid starting point. Which beautifully illustrates this point: There seem […]