[HN Gopher] Danish government makes its new economic model open ...
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Danish government makes its new economic model open source
Author : HumanReadable
Score : 772 points
Date : 2022-01-21 17:19 UTC (1 days ago)
(HTM) web link (github.com)
(TXT) w3m dump (github.com)
| gunfighthacksaw wrote:
| futharkshill wrote:
| An actual belief in this is ridiculous, and taking light on
| literal war and anti democratic effort and meme'ing it as
| "freedomed" is absolutely disgusting. You know that these are
| real human beings we are talking about right?
| gunfighthacksaw wrote:
| Oh wow, someone getting upset and moralistic at black humour.
| I've never seen this episode before.
|
| No, the real joke is that the US 'freedomed' a democratically
| elected socialist government and replaced them with a 'pro-
| freedom' dictator with the full support of other western
| countries, as they have done multiple times before.
| stusherwin wrote:
| An actual belief in what is ridiculous?
| salt-thrower wrote:
| I think that's part of the (dark) joke - "freedom" being the
| reason that the United States always gives before
| destabilizing a region and propping up corrupt dictators or
| puppet democracies which are anything but "free."
| whimsicalism wrote:
| You entirely misread the comment.
| lucian1900 wrote:
| The US decided to Chicago all of Chile because of what they did
| with Cybersyn: workers nationalising industry and planning
| production centrally.
|
| Denmark will be fine.
| boppo1 wrote:
| I don't understand the use of Chicago as a verb, can you
| help? Also, do we explicitly know it was the US, or just
| implicitly?
| guerrilla wrote:
| They're referring to the CIA assisted fascist coup where
| the Chicago Boys "ran" the economy afterward using it as a
| place to experiment with their ideology.
|
| 1. https://en.wikipedia.org/wiki/Chicago_Boys
|
| 2.
| https://en.wikipedia.org/wiki/1973_Chilean_coup_d'%C3%A9tat
| lucian1900 wrote:
| I guess the Chicago police murdering black communists
| fits too, although I hadn't thought of that initially.
| boppo1 wrote:
| Thank you.
| SuoDuanDao wrote:
| Thanks for the explanation, I interpreted as 'Chicago'd'
| as a reference to the city of Chicago's high violent-
| crime rate.
| [deleted]
| aliceryhl wrote:
| What actually happened to them? It is unclear to me how this
| could harm Denmark.
| zardo wrote:
| A CIA assisted fascist coup followed by tens of thousands of
| murders by the new government to secure power.
|
| Not to say that's a good model for Denmark in 2022, but
| that's what happened in Chile in 1973.
| SuoDuanDao wrote:
| And the coup that ended the experiment happened on Sept.
| 11. As Shakespear had his characters say, If this were
| played upon a stage now, I could condemn it as an
| improbable fiction.
| decebalus1 wrote:
| https://en.wikipedia.org/wiki/Project_Cybersyn
|
| "The system was most useful in October 1972, when about
| 40,000 striking truck drivers blocked the access streets
| that converged towards Santiago. The strike was supported
| by the Patria y Libertad group and at least partly funded
| by private donors who had received money from the CIA.[5]
| According to Gustavo Silva (executive secretary of energy
| in CORFO), the system's telex machines helped organize the
| transport of resources into the city with only about 200
| trucks driven by strike-breakers, lessening the potential
| damage caused by the 40,000 striking truck drivers"
|
| Fascinating stuff.
|
| Afterwards, https://en.wikipedia.org/wiki/1973_Chilean_coup
| _d%27%C3%A9ta... happened, to prove to the whole world how
| badly democratic socialism works.
| encryptluks2 wrote:
| [deleted]
| kasperni wrote:
| This model is supposed to replace the existing macro model
| cmoonly used in Denmark - ADAM (Annual Danish Aggregate Model)[1]
| which has been continuously developed and refined since 1970. You
| can find the yearly updates back to 1999 here.
|
| [1] https://www.dst.dk/en/Statistik/nyheder-analyser-
| publ/Publik... [2] https://www.dst.dk/da/Statistik/ADAM/Modellen-
| ADAM/Download
| streamofdigits wrote:
| Open sourcing models that are used for significant policy
| decisions (affecting others) is somehow required to protect and
| maybe enhance democracy in the digital age. Applies obviously to
| the public sector but also to private sector when it operates at
| large scale as a de-facto regulator / controller / planner of
| society.
| daxuak wrote:
| I bet there has to be better solutions than github.
| [deleted]
| stubish wrote:
| I bet there are not. A 3rd party willing to host and distribute
| your code for free without any contractual burdens which
| already hosts the vast bulk of your audience and the tools they
| will use. Seems a great idea, rather than spending money to
| self host or pay a different brand name and all the follow on
| expenses, for a worse result. Unless you are a government
| contractor.
| mkmk3 wrote:
| Perfect is the enemy of good. Sure there is, though the most
| popular alternative (Gitlab, from where I'm seated) IPO'd
| recently, and we know the effect that tends to have. Our
| national governments are already pretty comfortable with
| Microsoft products.
|
| Do you know any other git hosts that have persistently proven
| themselves trustworthy and have superior financial incentives?
| Otherwise it might be better to focus on the meat of this post
| Arnavion wrote:
| I'd be happy to focus on the meat of the post, but for
| completeness, the answer to your question is "The one you run
| yourselves."
| [deleted]
| m00dy wrote:
| Turkish Government needs to take a look at this.
| sshine wrote:
| Do you mean the Turkiye government? ;)
|
| (Reference to the recent news item that Erdogan made a public
| statement in which he renamed Turkey to Turkiye in English.)
| [deleted]
| throwawayboise wrote:
| Do countries get to declare how their names are spelled in
| other languages?
| bialpio wrote:
| I'd say so. Czechia may offer a fairly recent example of
| name change.
|
| https://en.m.wikipedia.org/wiki/Name_of_the_Czech_Republic#
| A...
| stkdump wrote:
| I think a country at least gets to decide what it calls
| itself in english. For example in official documents that
| they translate to english. Or what they teach in schools as
| the 'correct spelling'. Now if the rest of the world
| follows that is another question. Languages don't have
| owners.
| rileyphone wrote:
| I still refer to "Myanmar" by its true name, Burma!
| xunn0026 wrote:
| Excuse me? Of course! Do people get to declare their name
| and pronoun?
| clusterfish wrote:
| People generally do not get to declare how their name is
| spelled in a foreign language. It's determined by the
| government issuing them the document containing their
| foreign-spelled name. (Depends on the country of course,
| but this is typical)
| sofixa wrote:
| Of course they do! For my Bulgarian papers i was asked to
| spell my name in latin script however i wanted, and when
| i moved to France I was asked how is my name spelled, and
| i could change it if i want to (e.g. if i had an s in my
| name between vowels, in French it'd be read as z; in that
| case i could have changed the spelling to have ss, which
| is always read as s).
| mortehu wrote:
| If that's your whole reasoning I think "of course!" is an
| overstatement.
| throwawayboise wrote:
| So Germany really decided that its name in English is
| "Germany" and not "Deutchland"?
|
| I always assumed those names originated externally.
| zhoujianfu wrote:
| I'm pretttttty sure it originates locally! Why would the
| U.S. tell China to call us "Meiguo", and why would China
| listen?
| _dain_ wrote:
| They do, but only because the English-speaking world is
| peculiarly susceptible to this sort of manipulation. It
| started with Burma->Myanmar and Peking->Beijing, something
| nobody should have taken seriously.
|
| Nobody gets mad that Spaniards say "Londres" instead of
| London. It's funny how it's mostly despotic regimes that
| get so twisted up about these foreign linguistic matters.
| m00dy wrote:
| It is fine by me
| cs702 wrote:
| Wow, cool! The model is specified as a constrained nonlinear
| optimization problem for which a solution is found using high-
| quality proprietary numerical solvers.[a] All partial
| differential equations specifying the model have a basis in
| economic theory or in heuristics and approximations shown to be
| consistent with reality. Parameters come directly from (what I
| assume is a large amount of) economic data collected by the
| Danish government.
|
| The authors working for the Danish government deserve an A+ for
| making their code and assumptions public, along with
| comprehensive high-quality documentation.[b] It was a delightful
| surprise to click on the link and find... a carefully curated
| repo.
|
| I have only one nitpicking: This looks like the kind of project
| that should have been -- and in fact _probably should be_ --
| implemented in Julia, instead of in a proprietary language. I
| suspect many heuristics and approximations could be more
| accurately modeled by ML components, interspersed between
| equations, as has long been proposed by Julia folks like Chris
| Rackauckas.
|
| --
|
| [a] https://news.ycombinator.com/item?id=30028188
|
| [b] https://media.githubusercontent.com/media/DREAM-
| DK/MAKRO/mai...
| MAKROmaker wrote:
| Thanks! Julia was not even in 1.0 when we started the project,
| but would absolutely be a great choice today. So far, only the
| Conopt4 solver can solve our model, which means we have to go
| through GAMS even if we rewrite in Julia. I saw Rackauckas'
| JuliaCon presentation where he talks about ML approximations
| and immediately got excited too.
| sandGorgon wrote:
| What is your opinion of this vs Gurobi ?
|
| The only reason I ask is because your model is written in a
| proprietary language. While Gurobi models are written in
| Python (and solved by the silver).
|
| Just curious if you found it not effective.
| jlouis wrote:
| My guess is that the non-linearity of the problem might
| make it harder for something like Gurobi to solve. GAMS is
| essentially a frontend for solvers, so you are compiling
| your input source into a format suitable for an underlying
| solver or a set thereof.
| cs702 wrote:
| Thank you. That makes sense. Also, I fully get why you're
| excited: The use of "learnable components" for selectively
| replacing heuristics in models like yours seems like an ideal
| use case for Julia. (To me it looks like the future of
| modeling.)
| k2enemy wrote:
| FYI, the New York Fed's model is written in Julia and also open
| source.
|
| https://github.com/FRBNY-DSGE/DSGE.jl
| c3534l wrote:
| > # Note: Not sure why the 3 is there.
|
| Oh god, our economy is doomed.
| monkeybutton wrote:
| >Build: failing
| joebob42 wrote:
| And 40% code coverage lol
| jsiaajdsdaa wrote:
| Centrally planned economies are capable of interesting
| things!
| whitesilhouette wrote:
| It's not the planning, the funding structure is the real
| problem.
| erdos4d wrote:
| I wonder if this includes Christiania, the billion Euros of
| cannabis sold there each year, and the big lift all those drug
| tourists impart on the local service industry. Beautiful place by
| the way, would recommend.
| futharkshill wrote:
| Why is it that all weed enthusiasts always believe that MJ has
| any relevance to the, in this case Danish, economy? The amount
| of MJ use in Denmark is minimal compared to other countries,
| and certainly there is no where near "billions" of Euros sold.
| Certainly "drug tourists" make little to no impact on the
| tourism of Copenhagen.
| simonklitj wrote:
| Maybe drug tourism has little impact, but 24% of adolescents
| report that they've used it in the past year, and 41% report
| they've tried it. With it being illegal, there's no doubt
| that a fair amount of money is being moved around society
| shadily because of it.
|
| Source (from 2015): https://www.dst.dk/da/informationsservice
| /blog/2015/12/narko...
| harles wrote:
| It's probably still less than what an average adolescence
| spends on burgers.
| simonklitj wrote:
| I think that's true.
| hjort-e wrote:
| Christiania is like the least beautiful place in the country...
| throwawayboise wrote:
| Yeah it's a dump. I traveled there a few years ago with a
| buddy who was very excited to visit Christiania, like it was
| the key thing he wanted to do on the whole trip. He came away
| pretty disappointed.
| petre wrote:
| I agree. We went to the Louisiana Museum of Modern Art and
| walked from the station. The surroundings are stunning. Rural
| Denmark looks really nice. Christiania not so much. A lot of
| dubious looking people in the station. At least they didn't
| attempt to sell us drugs, maybe thanks in part to Danish
| culture.
| mikl wrote:
| Even if we assume that "the billion Euros of cannabis sold
| there each year" is not a wild overstatement (that's an
| unimaginable amount of weed), the Danish GDP is some 300
| billion Euros.
|
| As for tourism, it's just one of a long list of tourist
| attractions in and around the city.
|
| It would not make a huge difference if Christiania disappeared
| tomorrow (although Christianshavn would be a much nicer place).
| viztor wrote:
| I read the comment about the unreliability of economics, however
| I do like to point one thing, most economical model fit well when
| the economy is doing ok or within a certain range of parameters,
| until something outside of those safe area happens. Think of
| 2008, and think of the economical impact of the pandemic. It's
| impossible to account for in prior models and thoughts as those
| are nonlinear events almost no one can predict. This is the thing
| with economy, we can only know a bit about our position and
| surroundings, but we have no way of knowing if we are in a local
| optimum, or if we are approaching a tipping point that
| invalidates all prior models. There are variables that don't
| matter until they reach a certain mass, there are metrics we
| simply can't find quantitive method to measure, let alone to
| predict. Economics is always messy, and with a lot of the classic
| thoughts proven wrong, we should be wary of any of the
| assumptions we make.
| hgomersall wrote:
| Except that some economists did predict the global financial
| crisis based on their models. The thing that marked them out
| was that they were all heterodox economists. Largely the
| predictions were based on a solid understanding of the
| financial system, something mainstream economics completely
| ignores. https://voxeu.org/article/no-one-saw-coming-or-did-
| they
| jollybean wrote:
| It's a bit backwards looking in that it can assess known
| quantities.
|
| But far beyond 'Black Swan' events it's hard to account for
| innovations, geopolitical shifts, things that change the
| dynamic.
|
| Plastics, the dishwasher, women in Engineering and the
| workplace, the birth-control pill and Rock and Roll combined to
| shift things in ways we could not put down in math, at least
| beforehand.
|
| But the biggest 'black hole' is that it does not account for
| consumer surplus: we only measure what is bought and sold, at
| that price. We don't measure the leverage gained by consumers
| for cheap fashion, the benefits of more variety in goods, more
| vacation, shifting to bikes from cars etc..
|
| The data is still a beneficial area of study however.
| [deleted]
| riverdweller wrote:
| Great initiative, but I must ask: is the Greek compound formed
| from makro and gamy entirely accidental? Because it describes the
| past twenty years quite accurately.
| bigcat123 wrote:
| lordnacho wrote:
| I've yet to read a comment about how well such models predict
| reality. Who is going to weigh in?
|
| I studied economics, and I have some doubts about whether this
| kind of modelling works well enough to be useful. There's
| statistical issues like whether you have enough data to bring in
| your error bars, and theoretical issues like whether the thing
| you're studying moved below you because it's being studied.
| Neither of which invalidate the model entirely, but both of which
| make it a heck of a hard task.
|
| And in the end, what matters is whether it works or not. The
| Lagrangian for quantum physics is some huge formula that gets
| pushed as meme now and again but it works. Likewise f = ma works
| perfectly well for your high school rolling ball experiment.
| mediocregopher wrote:
| This is amazing! Whether or not every aspect of it is fully open-
| source, this is a great step forward towards governments being
| more transparent about how decisions are being made, and citizens
| being directly able to make positive contributions to that
| process.
| hashimotonomora wrote:
| Somebody teach Danes about reflexivity.
| KingMachiavelli wrote:
| Does this contain the land value tax formulas or is this much
| higher level than individual property taxes?
| em500 wrote:
| Note that the model is implemented in GAMS[1], a proprietary
| language focused at constrained optimization problems (think
| Matlab, but more niche). This makes it a non-starter for most
| interested outsiders.
|
| [1]
| https://en.wikipedia.org/wiki/General_Algebraic_Modeling_Sys...
| maxlybbert wrote:
| The New York Federal Reserve has a model in Julia at
| https://github.com/FRBNY-DSGE .
|
| The Federal Reserve has two models (
| https://www.federalreserve.gov/econres/us-models-about.htm and
| https://www.federalreserve.gov/econres/edo-models-about.htm ),
| written in EViews and Dynare, respectively.
| mountainriver wrote:
| Wow now I'm a fan of Denmark! This is the future of government!
| Guthur wrote:
| Soon they'll have our entire lives modelled out for us. Know
| what we'll be useful for, optimise to give us exactly what we
| need and nothing more. What could possibly go wrong.
| danuker wrote:
| Stuff will go wrong. This model only needs to be less wrong
| than the alternatives - such as a human committee.
|
| I much prefer a predictable policy in response to the
| economy.
| [deleted]
| TIPSIO wrote:
| Just now? Denmark is an interesting country for programming and
| technology education / discovery:
|
| https://www.quora.com/What-is-it-about-Denmark-that-many-wel...
| ricksunny wrote:
| Great! Are you familiar with the economic simulation work
| Threadneedle under Jacky Mallett in Iceland?
|
| https://github.com/jackymallett/Threadneedle
| zwaps wrote:
| Interesting, although a bit dubious. The claim is that there
| are no microstructure models in banking, and in the paper he
| cites two econ 101 textbooks.
|
| I mean, I guess the introduction is technically correct in
| stating that these textbooks are not sufficient to develop a
| microfounded model of banking. But then, one might suggest the
| author to perhaps look a bit further than Mankiw's 101 book?
| After all, textbooks treating the subject in more detail than
| even the present paper do exist, even from heterodox sources,
| if the mainstream is unacceptable.
| ford_o wrote:
| An ELI5 on what are the imputs and maximization criterium?
| dflock wrote:
| This is fantastic!
|
| I'm not qualified to make any, but are you expecting/hoping
| for/accepting pull requests?
| MAKROmaker wrote:
| Not expecting any, and the model is probably too complicated
| for outsiders to make substantial changes. But anyone is
| welcome and if the request is good I see no reason why we would
| not try to incorporate it.
| partiallypro wrote:
| I'm a skeptic, this could end up as a tyranny of metrics. Even
| the smartest people are often wrong about what is best for
| everyone. There's an information problem in that though there
| are/will be plenty of metrics, not all of the necessary
| information can always be known. That's ok for a company, but not
| an economy. Just make the data "open" to everyone, "the model"
| itself is a misnomer. Denmark already has one of the most free
| and open economies in the entire world...hopefully this idea
| doesn't help to kill the golden goose. I frankly think it will
| have no virtually no influence or impact.
| pdabbadabba wrote:
| What are you a skeptic of, exactly? This is the model actually
| used by the Danish Ministry of Finance to study the effects of
| various policy changes. I don't think there's any need to
| speculate about how much influence it will have: it apparently
| is already in use and guides policymaking. Other advanced
| economies have their own similar models used for studying and
| making various aspects of economic policy. I think another
| poster has provided a link to the model used by the NY Fed.
|
| At a high level, I, like you, am fairly persuaded by the
| Hayekian point that its impossible to collect enough
| information or otherwise capture the necessary complexity to
| reliably model even a moderately complex economy with enough
| fidelity to allow central planning. But this is far short of
| that. And there does seem to be a need for general models to
| allow policymakers to make informed decisions. The only
| alternative would seem to be to make no decisions at all which
| a) is itself a decision and 2) does not seem to be an option
| that many people seriously advance.
|
| I guess your position could be that these efforts are doomed to
| failure--i.e., no model will provide useful results. But that
| position--that no model will provide _any_ amount of useful
| information, even at very low levels of granularity, is a very
| strong position--much stronger than Hayek 's argument against
| planned economies--that I'd have to see some serious support
| for. And it certainly doesn't seem like a position that people
| should accept without a very convincing showing of its
| futility, given the significant costs of making policy
| decisions without even attempting to model them, or of making
| no policy interventions at all.
| mbar84 wrote:
| Economics is not a science like physics. We can't do controlled
| experiments, we can't falsify hypothesis. This leads to very
| muddy waters and what you are left with are two kinds of
| economists: Those who tell people what they want to hear and
| those nobody listens to.
|
| Econometrics gives people everything they want to hear, and with
| a scientific veneer as a bonus. The HN crowd should however
| appreciate how susceptible this is to the tyranny of metrics.
| Claude-Frederic Bastiat warned of this over a century ago with
| his parable of the broken window: Think not only of what you can
| see (the glazier who is employed to repair the window), but also
| of what you cannot see (the alternative purchase of a suit) had
| the window not been broken.
| abdullahkhalids wrote:
| Please note that the origins of modern science in Europe lie in
| astronomy [1]. Astronomy has always has been and is an
| observational science, yet has been enormously successful at
| creating models of what we see in the skies.
|
| Would you critique astronomy the same ways as economics? What
| is the critical difference?
|
| [1] Yes, there was a lot of simultaneous work in other areas as
| well.
| guyomes wrote:
| You might be interested in this book [0]. One idea from the
| author is that in astronomy, you model the behavior of a set
| of objects, where each individual object or "atom" of your
| simulation (planets, rocks) has a behavior simple and easy to
| model. In economics and social science, the "atoms" of your
| simulation are human beings, and there is no good intrinsic
| model for the behavior of a single human beeing.
|
| One of the observation of the author is that models work
| better if the human beings accept to restrict their behavior
| and follow simple rules. Another observation is that in
| social science, it is hard to design models that do a
| prediction significantly better than "tomorrow will behave
| the same as yesterday".
|
| [0]: http://www.ens-lyon.fr/en/article/research/your-life-
| numbers...
| vishnugupta wrote:
| > What is the critical difference? *
| Observers are also actors. They can and will significantly
| influence the observed. * Once observations are
| revealed at large it'll have short/long term consequences.
| There's a good reason fed gives multiple indications before
| changing any parameters such as interest rates, tapering
| etc., * Humans don't necessarily act like rational
| selfish agents (as economists expect) all the time. *
| Economics is often entangled with other aspects such as trade
| agreements, geopolitics some of which take years and decades
| to manifest.
| esarbe wrote:
| > What is the critical difference?
|
| - Astronomers cannot influence the system they are
| describing; there's no feedback. In economics there is.
|
| - Astronomy describes systems with a few, simple particles
| whose inner state is not relevant to the behavior at large.
| Economics describes (tries to..) systems with many complex
| 'particles' whose inner state is essential to the behavior at
| large.
|
| Not saying that this is what's fundamentally separates
| astronomy from economics, just pointing out some potential
| differences.
| _dain_ wrote:
| >Would you critique astronomy the same ways as economics?
| What is the critical difference?
|
| Astronomy doesn't fight back, economics does.
| runeks wrote:
| > What is the critical difference?
|
| Whether the stuff you're observing can read and understand
| your observations, and then choose to do the exact opposite.
| toyg wrote:
| Schrodinger's cat problem on a social level, basically.
| grey-area wrote:
| _What is the critical difference?_
|
| Economics is a dismal science and models rarely predict real
| word outcomes correctly. It's more akin to astrology than
| astronomy.
| charcircuit wrote:
| >We can't do controlled experiments
|
| Why not?
| tomrod wrote:
| Randomized controlled trials happen all the time. The OP is
| echoing a common Austrian economics approach in claiming that
| economics cannot apply the scientific method ever.
| mbar84 wrote:
| Because people aren't lab mice. My favourite example are
| claims wrt. experiments for the Universal basic income. These
| experiments always pertain to people who receive more money
| than previously, but somehow never include a proportional
| group of people from whom the money is taken away. To do this
| experiment correctly, you would have to pick a random sample
| of the population and do the redistribution regardless of
| what any of the participants want.
| zwaps wrote:
| A representative sample features the same external validity
| issues you have in many (any) experiments, including in the
| hard sciences. That's part of science, and it would be
| unfair to attribute it otherwise. One experiment won't do
| it.
|
| As for your other point, I guess the issue the lack of a
| hypothesis regarding basic income. You can't test "basic
| income" as such, and with such unspecific setup you are
| sure to conflate rather than illuminate mechanisms of
| relevance. In any case, it depends on your question whether
| you need to take income away from anyone. Are you going to
| start by examining distributive effects? Really? No
| physisict would test their airflow experiment on a flying
| rocket, while also trying to measure how he exhaust affects
| the wind in Costa Rica next week and saying 'something'
| about the future climate. They would start by putting their
| airflow gizmo into an isolated chamber - which is, afaik,
| more or less where UBI experiments are.
| mbar84 wrote:
| > Are you going to start by examining distributive
| effects? Really?
|
| Fair point. I guess you could run an experiment where
| money is simply taken away from people, destroyed and
| then look at the effect of that in isolation.
| jbothma wrote:
| But... UBI doesn't destroy what might be taken away. That
| money immediately goes and does work, and eventually it
| potentially improves the environment of those it was
| taken from. In the form of fewer social issues. Is the
| theory anyway.
| zwaps wrote:
| There are experimental Game Theorist experimenting with
| such schemes, I suspect because they get a great amount
| of enjoyment from taking things away from people ;-)
| mbar84 wrote:
| Fascinating. I wonder where he finds his volunteers. :-)
| Someone wrote:
| And lab mice aren't elementary particles, even though
| inbreeding can make them extremely similar, DNA-wise. Even
| if they were, they aren't humans, so extrapolating to them
| is an art in itself (physicists rarely do experiments with
| electrons and draw conclusions about neutrons from them)
|
| That it is harder to draw conclusions from experiments in
| biology than in physics doesn't imply biology isn't a
| science. Economics adds the problem that we (rightfully)
| don't want to do realistic controlled experiments (would at
| times be hard, too. Put a few million people in a country
| with a given law regime, watch for a couple of decades,
| draw conclusions. Repeat) but again, to me, that doesn't
| imply it isn't a science.
|
| I think it's more part of the humanities than a science,
| though.
| nautilius wrote:
| So, if you would want to test if, say, a pair of shoes
| improves running performance, it's not enough to compare to
| peers without change, or the situation before the new
| shoes, but you will reject the study unless you also have a
| third group where you break people's legs? How would that
| be necessary?
| mbar84 wrote:
| UBI cannot be implemented unless somebody pays for it.
| It's necessarily redistributive. All existing experiments
| only look at one half of the equation. I think it's a
| fair question to ask what the effect will be on people
| who on net will pay more than before this system was
| introduced. Breaking peoples legs is not a prerequisite
| for others to run faster.
| cycomanic wrote:
| Isn't the typical first principles argument that lowering
| taxes for the companies etc. pays for itself because of
| increased economic activity and thus tax income actually
| increases. Why could the same not apply for UBI?
| MatthewMob wrote:
| Of course not, there are a plethora of factors that would
| alter the effectiveness of UBI, looking at it so simply
| and then rejecting it outright is dishonest.
|
| Money would majorly come from those who have the greater
| means to pay larger amounts into the system, and on the
| hypothesis that bettering the material conditions of
| those in the lower and middle class will necessarily lead
| to increasing productivity and thus (and 'thus' is a
| large leap) greater general income that can partly be
| paid back into the system in a cycle.
| randomsilence wrote:
| You can use purchasing power parity differences to check
| it out. Find like-minded first world people to pool a
| fraction of their income and you can offer UBI to a third
| world village or town.
| tomrod wrote:
| Except UBI is simply a guarantee of a minimum income, not a
| distribution without other means of income. If UBI is 5k,
| everyone makes at least 5k. If you make 15k before, now you
| make 20k (modulo market adjustments).
| drran wrote:
| Who will pay for this?
| tomrod wrote:
| Many, with the benefit of a prosperous economy and stable
| polity.
| drran wrote:
| I'm not interested to pay 15k in taxes to receive 5k back
| as UBI, regardless of economy or stability.
|
| How much you plan to pay in taxes to support my UBI?
| tomrod wrote:
| I'm not interested in what you claim to pay in taxes. UBI
| benefits aren't solely to a person's bank account; the
| benefits include a prosperous economy and stable
| political environment their bank operates in.
|
| I expect to pay and continue paying a lot, yet the
| benefit is more than what I pay in taxes. What's better
| is that our current UBI is quite a bit above zero
| already, but the distribution is fraught with large costs
| in time. Re-organizing and streamlining UBI distribution
| would result in significant cost improvements to the
| current US welfare approach, and improve its impact.
| drran wrote:
| > the benefits include a prosperous economy and stable
| political environment their bank operates in.
|
| Can you back your claim with facts? UBI is universal, not
| magic.
|
| > I expect to pay and continue paying a lot,
|
| Just say a number, so we will put it into formula to see
| is your expected taxation will match minimum requirement
| for UBI.
|
| Typical wealth distribution without UBI:
| ^ | | | * | * * |
| * * | * * | * * |*
| * * *
| +------------------------------------------------>
| ^ - number of people, > - income
|
| Typical wealth distribution with UBI: ^
| * | | | | | |
| | | * | * | * | *
| | * * *
| +--U------------------------------------------->
| ^ - number of people, > - income, U - UBI level
|
| Please notice, that area (sum of n*i) of both graphs must
| be same, i.e. you cannot just print money like in
| computer game.
|
| As you see, UBI erases middle class. Everyone becomes
| poor, except some rich.
| tomrod wrote:
| While I appreciate the great efforts to put hand-waving
| FUD via terminal histogram graphics for insertion into
| comments[0] (seriously, great job!), your point that the
| middle class is guaranteed to implode is nonsensical.
|
| The US already has a non-zero UBI[1], it's simply
| inefficiently distributed via the negative income tax
| rate and various welfare efforts. That's a clear first
| area to fix things up. Then, if we need to increase the
| historically low tax rates on high income households or
| implement capital tax rates on the wealth, increases in
| taxes can be considered.
|
| Further, from a theoretical perspective, the economy is
| not zero-sum. A rising tide lifts all boats; if less
| money has to be doled out to industries supporting
| enforced poverty, such as private jail systems among
| others, then there is more money in the economy for
| utilization for many things (including but not limited to
| UBI). General equilibrium effects often have
| counterintuitive effects, such as they are.
|
| [0] https://xkcd.com/386/
|
| [1] https://en.wikipedia.org/wiki/Universal_basic_income_
| in_the_...
| drran wrote:
| If you're not a bot, then respond to my question.
| jhgb wrote:
| > regardless of economy or stability.
|
| So you're saying that you're a poor economist, then.
| tomrod wrote:
| There are very few good economists.
| sbmthakur wrote:
| Are there any studies out there that link UBI and
| prosperous economy?
| tomrod wrote:
| It's a bit early in the research space, but yes, the
| partial equilibria studied thus far show overall
| improvement.
|
| A reasonable overview:
| https://econreview.berkeley.edu/unboxing-universal-basic-
| inc...
| Dracophoenix wrote:
| I've always understood the parable of the broken window to be
| about opportunity costs. I don't see how it was a warning about
| metrics.
| mbar84 wrote:
| It's both. I don't think it's too much of a stretch to
| broaden what he meant by seen/unseen to also refer to
| econometrics models which incorporate only some things (that
| can be measured/seen) and not others (that are
| unmeasured/unseen).
|
| The seen/measurable: employment in the production of windows.
| The unseen/unmeasurable: missing employment in the production
| of suits.
| gtsop wrote:
| > Economics is not a science like physics.
|
| It's not that economics can't be a science like physics. It's
| that (most) economists don't treat it like a science.
| cospaia wrote:
| No, it can't be a science like physics. It is a science
| anyway. Just not like physics.
| stkdump wrote:
| I think the problem is that economics needs to take human
| behavior into account, which it tries to do via game theory,
| which in turn relies on rational actors. I don't think
| individual human behavior is predictable like that. You could
| argue that we don't need to model individuals, only large
| groups of people. But the problem is that often the behavior
| of some individuals has a huge effect on large groups.
|
| Contrast that to physics, where we have been very successful
| with predicting the behavior of masses both on small and on
| large scale, with relatively few exceptions.
| cospaia wrote:
| You are on to something with "behaviour", "actors", and
| "rational" . Ludwig von Mises defined "rational" as "aiming
| to an end, using means". That means that even someone
| performing a dance to produce rain is a rational actor. He
| formulated the axiom that "humans act". And then derived
| his theory from that. The science is named Praxeology. A
| big difference from the natural sciences is that you really
| can't falsify a theory using empirics. There is no way to
| repeat an experiment, because reality has been
| reconfigured. Therefore axiomatic theory is what you have
| to rely on. Which is not too bad. After all sciences like
| geometry also make do without empiricism. (There is no way
| to empirically disprove that a triangle has an angle sum of
| 180 degrees.)
| zwaps wrote:
| Economists do plenty of experiments.
|
| As for Econometrics, I agree that studies employing
| observational causal inference in statistics are much harder
| (and harder to swallow) than experiments. Usually.
|
| But perhaps, if you dig a bit deeper and ask yourself things
| like: "what makes a hypothesis falsifyable" or, "could there be
| a hypothesis falsifyable by observational data?". Have your
| ever written down the exact exclusion condition (or exogeneity
| condition or whatever) you use in your experiment? You might
| find out something interesting.
|
| Controlled experiments, much like any econometric (or
| statistic) technique, require identification assumptions. And
| of course, these can not be proven. Even though many people
| believe it is so, experiments are not really different in kind,
| the assumptions are just usually easier to believe. Not always,
| though, which can also be fun. Even in an experiment, you - in
| fact - observe reality only once. In other cases, however, we
| find out that our assumptions about the identification in the
| experiment were wrong, due to factors we didn't know about.
| This happens even in physics (shocker, I know).
|
| Keep an open mind, would be my advise. Your critiques are well
| known, and in the broad sense tackling them is the business of
| statistics. By the way, there are indeed smart people here and
| there.
|
| A good heuristic: If your find yourself rejecting entire
| disciplines, like econometrics, all while implictily using
| auction theory, regulation, pricing etc. in your amazon, ebay,
| cellphone, or energy grid, you are probably on the wrong peak
| of a Dunning Kruger curve.
| [deleted]
| mbar84 wrote:
| I understand the argument and I accept the idea of natural
| experiments in principle. The most difficult thing with all
| of these is the ceteris paribus (holding all else constant),
| or as a second best, correcting for known confounding
| factors. This is in such stark contrast to a lab setting,
| where an adversarial scientist can regard a hypothesis as
| wrong and construct an experiment to prove it so, only to
| find out that the hypothesis isn't falsified. With statistics
| and models on the other hand it always devolves into
| discussions about variables, confounding factors and there's
| never a satisfying resolution, especially on controversial
| results.
|
| The number of places for bias to creep in are way to many. I
| think the econometrics people have gone down a hopeless path,
| guided by wishful thinking and demand from people who want us
| to be able to make statements about things which we just
| cannot do.
|
| The parts of economics that are valuable are not based on
| econometrics, but upon reasoning from first principles:
| Incentives, supply and demand, game theory etc. under which I
| would argue all of your examples fall.
| cycomanic wrote:
| > The parts of economics that are valuable are not based on
| econometrics, but upon reasoning from first principles:
| Incentives, supply and demand, game theory etc. under which
| I would argue all of your examples fall.
|
| So how do you confirm these first principles? I'd argue
| that those are an even wider door to let your biases flow
| into the analysis. I mean this type of argument has given
| us trickle down economics which has significant real world
| evidence it doesn't work.
| hgomersall wrote:
| It's worse than that, not only are the first principles
| demonstrably flawed, the towering edifice built on top
| fails due to some very iffy analysis. It's remarkable how
| much time and effort goes into attempting to maintain the
| idea of equilibrium in economics. You can only add so
| many epicycles before you should perhaps consider your
| model is wrong.
| zwaps wrote:
| Then I don't get it. If you accept first principles, then
| the world of structural econometrics is open to you. Cake
| having, and cake eating - at the cost of structural
| assumptions. All you are doing then is filling your models
| with some actual data.
|
| Could you be more specific what is a lab setting for you?
| Natural experiments are not what I meant when I spoke of
| experiments, as natural experiments are observational
| inferential methods!
|
| btw did they ever tell you about that physics experiment in
| a lab that was built just over a subway line? So much
| confounding!
|
| Jokes aside, your assumptions amount to assumptions about
| what "controlled" and "in a lab" means. I hope you see it
| makes more sense to define the requirement for experimental
| identification mathematically, in which case you'd see that
| the conditions are not different in kind, only in degree.
| etc.
|
| Edit:
|
| If that counts as revealed preference data, I can assure
| you that econometrics are used to great effect in pricing,
| auctions etc - one of the reasons certain orange and blue
| companies hiring experts on this have become mucho rich in
| the past couple of years. Some oldschool econ models may
| not be the best to describe the altruistic, boundedly
| rational present-preferrer. But oh boy, can you make some
| serious dough if you can mechanism design the auction
| platforms and the best the firms can do is to try to train
| some machine learning models against it.
| mbar84 wrote:
| The only thing to which I will object here is the use of
| the word "only" from "not different in kind, only in
| degree".
|
| There is a substantial difference in degree when dealing
| with atoms, molecules, homogenous materials vs. people
| who think, face incentives and understand game theory.
| 7thaccount wrote:
| Not an economist, but my job role involves lots of economic
| theory and I'm a few classes into an econ masters.
|
| As far as economic reasoning goes, there are some studies
| you can do (like optimal auction clearing) where you can
| hold the inputs equal and then adjust some aspects of the
| optimization (the objective, constraints, or decision
| variables) and get a very accurate picture of how market
| changes would impact the results. I think that is probably
| an exception rather than the normal case though.
|
| In general, my thoughts during my studies has been that the
| economic theories of supply & demand, incentives,
| elasticity, theory of the firm, game theory, government
| intervention...etc all has more use as a generic framework
| of thinking (ex: if we put in a price cap, here are the
| expected impacts), rather than an equation I can use to get
| an exact answer (basically exactly what you're saying
| above). Doing some kind of analysis on things as complex as
| the US economy must have massive inaccuracies involved as
| there are too many factors and even behavioral economics
| doesn't have all the answers for why people don't always
| act rationally.
| [deleted]
| dkga wrote:
| First issue: "This is too cool to be true! #1"
|
| Nice! Kudos to DREAM!
| dane-pgp wrote:
| I've often wondered whether the first super-intelligent AI that
| gets created, if it somehow manages to be both under government
| control and not put to strictly military uses, might be tasked
| with modelling the economy and deciding on the "correct" set of
| economic policies.
|
| Extending the scope of AI decision-making outside of the realm of
| economics seems much harder, though, as there's much less
| training data for questions like how to educate students in a
| pandemic, or whether to loosen planning rules for building wind
| turbines.
|
| I suspect that before AI becomes capable of providing good
| answers to those questions, it will already have changed the
| world beyond recognition, and probably not in a good way. The
| best we can hope for is mass unemployment and a UBI, which will
| also make all economic models obsolete too.
| danuker wrote:
| > UBI, which will also make all economic models obsolete too
|
| But how would you decide how much to give through UBI next
| year? How inflation will change in response? How many people
| will still be needed in jobs?
|
| You still need a model, because the world is changing, and a
| model helps you understand how.
| dane-pgp wrote:
| Sure, you would _want_ a model to aid decision-making, but if
| there is (initially) no data for how the economy will behave
| under a UBI and with 80% unemployment, for example, then all
| existing models might end up generating predictions or
| recommendations that don 't help at all.
| danuker wrote:
| The model encodes some generalities that may still hold
| true, given that it was fit on a lot of scenarios, and a
| lot of brainpower went into it.
|
| But sure, it might completely miss some novel phenomenon.
| It is up to the humans running the model to be aware of its
| limitations and accuracy.
|
| In any case, the more heads thinking about the problem the
| better, and the model is an approximation of a lot of
| heads. And the equations can show why it thinks what it
| thinks.
| beaconstudios wrote:
| That was actually likely to happen at one point - either in the
| Soviet Union through OGAS [1] which was rejected due to
| bureaucratic politics, or Chile's Project Cybersyn which was
| cancelled due to, uh, American interests. It would have been
| extremely interesting to see what a planned economy utilising
| cybernetics and rudimentary ML would've been capable of,
| especially as the technology improved.
|
| 1: https://en.m.wikipedia.org/wiki/OGAS
|
| 2: https://en.m.wikipedia.org/wiki/Project_Cybersyn
| lifeisstillgood wrote:
| Isaac Asimov thought so too :-)
| rixed wrote:
| What makes this model specific to Denmark, apart from the
| supplied baselines?
|
| Also, is anyone aware if such large scale automatic optimisation
| solvers are used in other departments, such as crime regulation,
| health care, military?
| CryptoPunk wrote:
| This is the best use of government.
| ddesotto wrote:
| THIS is the way.
|
| It is a step forward in transparency (even though 90% of danes
| probably don't understand a thing of what was published) which is
| something no one I know is opposed to.
|
| Hope this sets a precedent for other countries to follow!
| hazza_n_dazza wrote:
| I guess the way is to verify and check the model over the
| coming years against the open data which initiated it... so
| we'll see :) these things can get quite chaotic when taking
| externalities into account.
| infogulch wrote:
| I bet studying this would be a good graduate-level economics
| course project.
| [deleted]
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