Real Chaos, Today – Randomised controlled trials in economics | Hacker News Reader

Real Chaos, Today – Randomised controlled trials in economics

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Informationally, this post lands on information regarding randomized controlled trials (RCTs). However, there isn't a specific thesis I can nail down outside of introducing a general audience to the history and philosophy of RCTs. There is some discussion regarding how they aren't a panacea, but its more of an afterthought.

I really liked Judea Pearl take on RCTs in his "The Book of Why". It is not much of the history or philosophy, but he show why RCTs works, why randomness do the trick, he does it from the standpoint of a wider theory of a causation that can explain not just RCT but also other methods of untangling causes and effects, and therefore it becomes easy to him to talk why RCTs may not work.

Aye, Pearl's explanation and textbook Causality are fantastic.

At this point you could just simulate complete economies on a PC.

A medium sized country has 10M people doing ten transactions per day on average. Why have mathematical models when you only ever need to add and subtract.

Adding and subtracting are insufficient for models that are probabilistic and have interconnected dependencies (graphs).

It may be probabilistic in tx matching but you can simulate every transaction precisely.

Not sure I understand the latter argument.

I don't think we have sufficient models as to why each transaction happens or not. For example, why did someone buy blueberries instead of raspberries?

That's only tangentially related to economics. There are no economic reasons why I prefer TBS to FPS games.

That is what economics is about in no small part: preferences, their pricing and expression.

The pure movement of money isn't particularly interesting.

The pure movement of money is interesting as long as we have economic crashes happening from time to time that we don't predict.

Preferences and pricing is marketing, not purely economics.

Movement of money isn't causing crashes, but, for example changes in preferences who to move it to or not.

What do you think economics is about if it doesn't include preferences and their expression.

Btw., we have nearly endless information on the movement of money and credit.

To add to what to the other poster said, and to help explain, also were you influenced in buying blueberries because of what other people did in your graph?

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