Queequeg
Member
- Joined
- Sep 15, 2016
- Messages
- 1,191
Kind of like Long Term Capital Management, the central banks, etc.? Really useful modeling right?
There's another reason large companies hire economists and do econometrics. They can write it off. Government hires economists for another reason as well, they specifically hire Keysnians because that school of thought says that government intervention is helpful. If you were a corrupt government that wanted to give their friends stuff, and economist A says "the best thing is for you to take a hands off approach" and economist B says "the best thing is for you to exert regulatory control and monetary control over the economy" which school of thought would you hire economists from?
If they were really so concerned with accurate modeling, wouldn't every FED chairman who said "no recession on the horizon" DURING a recession immediately resign and fire everyone that created that conclusion with their modeling? What's a better hypothesis, those people maintain their positions because the central bank wants to get the best models, or because they have no concern for that and they are just there to propagandize the public about the economy? Which one of those explanations better explains why no one is ever fired or forced from their jobs when their models predict a situation in diametric opposition to the situation that happens IRL?
More uninformed opinions that only further demonstrate how little you know about economics. Economic models predict a range of statistical outcomes, any of which have a chance to come true. Pointing to one example where people bet incorrectly on a model’s most likely outcome doesn’t negate the usefulness of models but only shows your misunderstanding of how Wall Street Quants work. As for the Central Banks, your naiveté in thinking that their goal is to help keep the economy humming along only shows how much you don’t know outside of the lab. Do you likewise think that the goal of medicine is to help people get better? And no, businesses do not hire economists for a tax deduction FFS. They also don’t pay people to dig and refill ditches in their parking lot for a tax deduction either.
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