>"I know the effect of policy X on the US economy because I learned pic related in intro to microeconomics!"
Why are there so many retards like this on /biz/? Do econ professors need to start stressing that that model is based on a billion different assumptions, key of which is a perfectly competitive market? Or would people just ignore that and pretend liek they know fuck all about the economy anyway?
>supply demand chart
literally the business uni in one picture. complete bogus and useless bullshit that has nothing to do with reality
>Theory that is literally predicated on assumptions not found in the real world
>There's nothing wrong with it!
Theoretical models are tools which can be useful when trying to predict certain things given certain parameters. They do not represent laws of human nature, and if you honestly think people walk around behaving rationally with perfect knowledge of the future and all transactions, you're an idiot.
Any economist would tell you this, so please go on and tell me why you trust their chart tool over their own empirical data.
That's the whole point, anon. You can't describe human behavior via 2-dimensional charts.
Do some research on empirical/experimental economics. David Card and Alan Krueger did a study over 20 years ago using sound data and found that there wasn't actually a loss of jobs from small, incremental raises in the minimum wage. Their results have been repeated multiple times since.
This flies directly in the face of the theoretical principles of the above chart. But at the end of the day, those assumptions aren't true in the real world.
The reason studies like this aren't popular sources in the public, though, is because they only describe a very narrow phenomenon, and unlike theoretical models, they can't explain a wide variety of things. It's safe to say from the data, for instance, that a small raise in minimum wage is not bad for the economy. It's wrong, however, to say that more than doubling it wouldn't be.
The point is that economics, as any social field, is extremely complex, and oversimplifying it by pretending the basic framework we use for college freshmen to understand it is the end-all source for how the economy works is ridiculously stupid and ends up creating misconceptions about the way things work. At teh end of the day, you don't know how policy X will affect the economy. You might be able to make a reasonably educated guess, but that's as far as you can get without million-variable models and in-depth empirical research.
Because econ professors learnt this way, too. At some stage during the "mathematisation" of economics someone forgot to talk about assumptions and model error (at least in undergrad levels, when it's important to their learning), now we are living in strange times.
Neoclassical supply/demand curves have been debunked by heterodox economists so many times it's not even worth going into.
Even Alfred Marshall said it's just a way to think about things, not the truth.
Well supply and demand sure as shit isn't linearly related.
How we find the truth I'd love to discuss, but there are a lot of econ graduates that are weak. I've met Masters graduates that aren't really sure what central banks do, and how they affect markets beyond basically quoting their textbook. No intution.
That's kinda sad and scary, right?
btw, economics degrees these days are weak on numeracy. People do them because they can't hash more quantitative degrees. This is my experience anyway.
I don't think the issue is lack of quantitative aspects. I have a friend who took the BS track of econ the school offered while I took the BA. He several times pointed out how jealous he was that I got to actually discuss real-world applications and things beyond simple mathematical proofs and theories. At the end of the day, economic theory backed by math is still just that.
Unless, of course, by quantitative you meant statistics, in which case I completely agree. I had this peculiar little asian professor who would rant for entire classes about this stuff. He was pretty much a hard-science economist, which really blew me away. I had always disliked how so much of economics was simply whatever school of thought you belonged to, but it was the first time someone in the field actually explained how flawed so much of the field actually is.
But then again, the shift in academia is certainly going toward more empiricism with causal relationships, so I think things are getting better.
"Theoretically sound" =/= "how the world actually works"
And if your models can't predict human behavior, you probably shouldn't use them as anything but a most basic starting point. At the very least you should adopt a model that relies on a complex and imperfect market with imperfect information and irrational people.
>weaker than finance, marketing, accounting, managment, etc
>despite BSs often requiring strong quantitative backgrounds in calc, diff equations, linear algebra, econometrics
Oh, so this is just one of those elaborate Fight-For-15 shill topics and we just wouldn't understand because it's abstract kind of economics, right?