tag:blogger.com,1999:blog-1740670447258719504.post4125014825753299210..comments2024-03-27T03:00:27.024-04:00Comments on Facts & other stubborn things: Standard candles, instrumental variables, economics, and physicsEvanhttp://www.blogger.com/profile/12259004160963531720noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-1740670447258719504.post-87692155023050168592013-02-21T16:11:21.381-05:002013-02-21T16:11:21.381-05:00Very energetic blog, I loved that a lot. Will ther...Very energetic blog, I loved that a lot. Will there be a part <br />2?<br /><br />Here is my page; <a href="http://bestcloudcomputingoffers.com/firehost/" rel="nofollow">firehost Evaluations</a>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-13008383445469714052013-02-09T08:34:59.599-05:002013-02-09T08:34:59.599-05:00Well, in cases such as Barro's, the author was...Well, in cases such as Barro's, the author wasn't one in the first place.Unlearningeconhttps://www.blogger.com/profile/13687413107325575532noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-62252947660043132362013-02-09T08:34:31.335-05:002013-02-09T08:34:31.335-05:00Which studies? As against defense spending as I am...Which studies? As against defense spending as I am, I would be interested to know why that is.Unlearningeconhttps://www.blogger.com/profile/13687413107325575532noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-85558853426860688942013-02-08T18:27:35.623-05:002013-02-08T18:27:35.623-05:00But the multiplier for "defense" spendin...But the multiplier for "defense" spending has never been anything greater than 0.7 in even the most optimistic of studies.Ken Houghtonhttps://www.blogger.com/profile/01440837287933536370noreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-32532948885086612582013-02-08T18:19:45.059-05:002013-02-08T18:19:45.059-05:00If I found what I thought to be strong evidence th...If I found what I thought to be strong evidence that the multiplier is below one, I might not end up a lefty either!Dnoreply@blogger.comtag:blogger.com,1999:blog-1740670447258719504.post-26898002990829139222013-02-08T13:56:06.208-05:002013-02-08T13:56:06.208-05:00"This is exactly like an instrumental variabl..."This is exactly like an instrumental variable problem. We are interested in supply elasticities and demand elasticities, but a sest of observations does not give us either of those. When we look at variations in the price and quantity of an object we don't know the mix of a change in demand and a change in supply that causes those observations to change. So we look for standard candles, or as economists call them - instruments. We take a known, independent shift in one of the magnitude (say, supply) and then with a little math we can back out the value of the other (demand)."<br /><br />I think the difference here is that demand and supply are 'invented' concepts that are hard to pin down. Obviously physicists use concepts that 'don't really exist' (or may not) too, but there's generally something concrete there.<br /><br />In other words: you have to assume demand and supply are meaningful and important concepts in your calculations. Yet many economists, particularly Sraffians, dispute the usefulness of these in assessing relative prices and distribution.<br /><br />"This is not the result of physics envy. This is because of the fundamental gulf between observation and explanation that is true of any human interaction with the world."<br /><br />This is a reason why I think economists should be *more* concerned about mechanics and assumptions than scientists: the lack of definitive empirical verification.<br /><br />Obviously politics is a problem in economics, too. If somebody's written a paper saying the multiplier is below one, 99 times out of 100 you can bet they're not a lefty!Unlearningeconhttps://www.blogger.com/profile/13687413107325575532noreply@blogger.com