Monday, May 26, 2014

On Econ Empirics

http://www.bloombergview.com/articles/2014-05-22/why-is-econ-101-so-bad

Noah Smith proposes that economics be taught empirically with much more data. I agree.

In physics the trajectory of a ball thrown in the air can always be predicted with a quadratic curve, whereas in economics the price of milk cannot always be predicted. Some people say, this is the reason why economics is an immature science.
 
Physics seems to have a power of explanation in this point and teachers should teach econ empirically. However, only with data cannot we tell good econ theory from bad one, nor can we eliminate any political ideology or psychological bias.

The result drawn from the regression is quite hard to read and is always open to dispute. There's much room for biases. We need data when we study econ and I agree, but it's always difficult, not easy, to collect the correct data set and to read the results. That's why there are always disagreements and conflicting views even when experts of econ theory discuss the same econ issue.
    

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