Yanis Varoufakis - Economics Is not like physics
"Well, because economics is not like physics. And what is the profound difference? If you look at the curricula of economics departments, [...] if you look at textbooks, if you look at mainstream articles published in 'Econometrica', in 'Journal of Political Economy' ... it's not obvious that economics is not like physics. You start with assumptions. You build theorems. You prove the theorems. You have lemmas. Then, usually, somebody, maybe not the same author, collects some data and tests empirically, econometricly mostly, the reduced forms of the equations that derive from the theorems ... Isn't that what physicists do? ... More or less. ... But the profound difference, allow me to say, between economics and physics, is that, in physics the phenomenon doesn't give a damn about our models of the phenomenon. So, a meteorologist doesn't have to worry that the weather may change its ways because he or she has made a particular prediction. Whereas in social science, whether it's sociology, economics, whatever. The phenomenon really cares about our theories about the phenomenon. Because, as theories have the capacity to alter our behavior in accordance to the theory. So you get, to put it in statistical terms, a plethora of false positives and false negatives."
From:
"Yanis Varoufakis: From an Economics without Capitalism to Markets without Capitalism | DiEM25"
• Yanis Varoufakis: From...
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The number of people who base their decisions on fringe or even mainstream economic theories directly, are nearly insignificant
It's often the same people who say "economics is not like physics" who criticize econometrics as a purely historical science. This is ironic since they believe econometric estimations of a reduced-form equation derived theoretically are historical AND invalid since the results affect future behavior and expectations? Make this make sense, Austrian Economists.
Heard that million times from economists. Could be interpreted like econ is 'harder' than physics. Its not. And im a econ major.
Economics and physics are two separate (but related) disciplines. They do not have to have the same qualifications. Physicists use mathematics in their work to get a more precise result from an economist. They calculate by point shooting and wait for the results. In this context, the economy is a bit more like politicians. It only takes math, not lying, to smash the atom or build a bridge, but it may take as many lies as the mathematical calculations necessary to preserve a country's reserves and ensure that its currency does not depreciate. Science always has a purpose, and the same ways do not have to be followed. In short, while everything is done with a definite result in physics, tomorrow is different from today in economics, I think everyone agrees on this issue. At its simplest, such a reason causes the two to be different branches of science. (social & mathematical science / mathematical science)
@efebulbul61
Жыл бұрын
The more we examine, the more we will find commonalities.
Economics is already great Doesn't need to be like physics too Hayek and economist said economics if similiar is more to biology than physics Physics is predictable but economics and markets aren't
So basically its not a science and is completely arbitrary and abstract.
@grubernitsch
5 ай бұрын
I think his point was exactly the opposite, and he said it literally, "as theories have a capacity to influence our behavior," "the phenomenon really cares about the theories of the phenomena," etc. Combating the tendency to cancel out elements in the equation for the sake of simplicity, populist sentiment, etc., which ultimately sits painfully close to a Carl Schmittian "friend/foe" distinction...is perhaps the toughest battle for us Millenials or Gen Xers to survive.
yeah physics is real science
I absolutely disagree with this guy. Not going to get into the nitty gritty. But physics of economic model makes the case pretty clear. Especially in regards of physics explaining energy and how it changes form. How energy can change matter economies can be looked at in the same way
@ollielon5926
2 жыл бұрын
Well, many professionals outside of economics have contributed to economic understanding better than economists. From what I've read, economists work under false assumptions. I guess its due to penis envy, I mean, physics envy.
@minhnguyenphanhoang4193
Жыл бұрын
So how does it change when I suddenly want to each ramen although the price increase ? 😂
@duellinksantimeta7636
8 ай бұрын
Physics always works perfectly. Economics can be manipulated.
Well both fields require extremely high iqs. 1. Physics 133 2. Hard Philosophy 130 3. Mathematics 130 4. Material Sciences 129 (Kinda surprising) 5. Economics 128