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From a Heritage rebuttal to Krugman:

We used the highly regarded U.S. Macroeconomic Model of IHS Global Insights, Inc. Perhaps this is a model you as a pundit “do not recognize,” but most economists do.  This model has been around in its various forms for nearly 50 years. It contains over a thousand equations and several thousand variables (wintercow emphasis). The modeler’s ability to affect the mechanics of the model is very limited, and, given the fact that the Budget Committee gave us final inputs only a few days prior to publication of their budget, we only had time to make sure that this detailed model would solve with the enormous changes to public policy we had to introduce into it.

Yep, we can model the entire intricate workings of 311 million people over a 10 year period by having some guys in white coats write down some equations (what functional form) with lots of data (such as the only stuff we can actually measure) and then get in a fight about whose model works and whose doesn’t. Yuck.

One Response to “The Problem with Economics, Episode 721768”

  1. Harry says:

    Again, wintercow nails it.

    I was especially impressed that one of the competing models has been around for over fifty years. I wonder how they worked the problem with one of those clickity-bang calculators the size of a riding mower. I also wonder if they had any of their own money riding on their predictions.

    By “they” I mean anyone who may have ventured real money on their sophisticated models. Their own money.

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