The third great truth in this list is "an increase in the money supply leads to inflation, except when it doesn't" which is hard to argue with. Clearly a field where Nobel prizes should be awarded.
The fourth great truth barely counts as a statement, really. You can't make the first great truth that demand drops cause economic shocks through layoffs, argue that's not obvious, then make the fourth great truth that things other than demand drops can cause economic shocks.
My personal take is that the field is stuck in an existential local minima and are self-conscious about it: similar to how astronomy was stuck on the model of concentric spheres. I think everybody who practices the field is unconsciously aware of it too which is why they lean on hand-waving charts and opaque math that anybody in a harder science would instinctively call bullshit on. How psychology got to be the poster boy for the replication crisis in the social sciences and not economics is baffling given the scope and depth of influence the field has had on the world.
But don't take my word for it... https://academic.oup.com/ej/article-abstract/127/605/F236/50...
We investigate two critical dimensions of the credibility of empirical economics research: statistical power and bias. We survey 159 empirical economics literatures that draw upon 64,076 estimates of economic parameters reported in more than 6,700 empirical studies. Half of the research areas have nearly 90% of their results under‐powered. The median statistical power is 18%, or less. A simple weighted average of those reported results that are adequately powered (power ≥ 80%) reveals that nearly 80% of the reported effects in these empirical economics literatures are exaggerated; typically, by a factor of two and with one‐third inflated by a factor of four or more.Some of the smartest people in the field are actively trying to obscure its limitations. The author of this article is more modest but even still it’s a PR rebuttal and a bullshit fear tactic: a “You know what? Things are really bad but what would be worse is if you didn’t listen to us”.
Hand-waving charts are how the subject is taught to indifferent undergraduates. And the charts aren’t hand waving, though they may seem like it when the undergraduates don’t understand. (Source: “hand-waving” chart using economics professor, though I do my best to help them understand.)
Research as practiced in university departments does not rely on “hand waving charts.” You’ve probably never been to a research seminar in economics. It is all about how parameters in a model are identified.
Whether “the math is opaque” I cannot say. Is it more opaque than computer science? Or math in math departments?
If you can find a simple, not opaque way to do the same, the world’s macroeconomists will beat a path to your door to learn from you. They’ll even nominate you for their fake Nobel. You can refuse it if your conscience (or the sprit of Alfred Nobel!) demands it, but like all Nobel prizes it comes with a cash reward.
Also... no one in the field cares that it’s the “bank of Sweden memorial prize in honor of Alfred Nobel”. Make it just the “bank of Sweden economics prize” and we’ll still be excited about it. We could care less that it has Nobel’s name on it.
The paper you cite is published in... an economics journal! And it is not the only one on the topic. We are aware that the standards for empirical work may need to be higher. Indeed, this is the second time in thirty years we have come to that conclusion. This problem is not unique to economics.
Maybe I shouldn't speak for all of us: probably some actually could care less than they do, while maybe others couldn't care less.
I am in the "couldn't care less" camp. Call the prize whatever you want.
The math says that inflation has destroyed what was rightfully a much stronger currency because of the work that went into it.
There is no shadowy cabal of elites, it's a blatant effort of independently greedy overprivileged beneficiaries who are in position to thrive better the more that the general financial malaise of working people becomes overwhelming. Lots of the wealthiest have never built their original family fortunes any other way.
There's not supposed to be a need for a consumer economy.
Remember how it was, over the last 50 years of macroeconomics? There are equations for this.
Every single recession was never going to end until consumption picked up.
Too bad consumers are just about tapped out, so naturally it's going to be worse than ever.
That's no conspiracy, that's just what the math said.
What if we would have had a producer economy instead, or even just a more reasonable balance?
How do you like it when your equations show what you thought was a negative was reversed back into positive territory like the 21st century has never seen?
Remember in expensive places like San Francisco or New York City, the small single-family homes which are out of reach for all but the most fortunate today, were the exact same homes that were well within reach for a wage earning factory worker, the kind who eventually retired without significant raises over their career while producing products which required no price increases since there was no serious inflation. Their passbook savings accounts provided a secure retirement after their home was paid for, and property tax at the time was still insignificant compared to today. Only a single income was necessary for that kind of security.
If you had a better-than-average job, like being an engineer or something, and had the disposable income for more meaningful investments than mere passbook savings, your single-income family would not have needed to settle for the smaller homes and you would have been able to retire someplace like Florida or Hawaii for instance in perhaps more deluxe accomodations than you had during your working years.
The old folks' UBI of Social Security came along just for those who missed the boat altogether. Wasn't really needed until after the Fed had settled in a while.
Remember, there's not supposed to be a widespread need to raise your socioeconomic stature unless something is wrong to begin with.
It's just nice having that opportunity if you would like to take it, and productive capitalism can be one of the efficient options but there are others which are even quicker, with many of the quickest not actually productive in the _macro_ sense.
As we have seen.
The math says that inflation has devastated the US dollar and the vast majority of American workers with it, because that's the only dollar they were working for.
People are so desperate some of them would probably rather work for some imaginary coin now in way that would never have been considerable when silver dollars still had their intended $1 face value.
Hindsight's 20/20, if your equations do not yield the actual outcome you may just need to brush up on your business math.
All kinds of math could be more accurately done, right now we've got 45 comments remaining but it says 139 at the top of the page.
Apparently over half the comments at the time have now been retracted, maybe it was bad math on all sides?