Comments on: Are The Big Four Econ Errors Biases? http://www.overcomingbias.com/2006/11/the_big_four_ec.html Overcoming Bias is economist Robin Hanson’s blog, on honesty, signaling, disagreement, forecasting, and the far future. Sat, 11 Feb 2012 23:23:58 +0000 hourly 1 http://wordpress.org/?v=3.1.3 By: Overcoming Bias : From Eternity To Here http://www.overcomingbias.com/2006/11/the_big_four_ec.html#comment-589287 Overcoming Bias : From Eternity To Here Mon, 05 Dec 2011 13:20:29 +0000 http://prod.ob.trike.com.au/2006/11/are-the-big-four-econ-errors-biases.html#comment-589287 [...] style, I’m again struck by how different is the public’s preferred style for popular physics vs. economics books.  Popular physics [...] [...] style, I’m again struck by how different is the public’s preferred style for popular physics vs. economics books.  Popular physics [...]

]]> By: daedalus2u http://www.overcomingbias.com/2006/11/the_big_four_ec.html#comment-498300 daedalus2u Sun, 28 Aug 2011 02:07:26 +0000 http://prod.ob.trike.com.au/2006/11/are-the-big-four-econ-errors-biases.html#comment-498300 Wow, how prescient, and you wrote this in 2006? In 2008 they nearly did collapse world economies and they are about to do it again by trying to balance the budget on the backs of the poor and wage earners. They really do believe the “raise the minimum wage and unemployment goes up” idea. That is why they are so opposed to letting Obama reduce payroll taxes. If wage earners get more take home income, that is just like raising wages and so it just has to cause more unemployment. Wow, how prescient, and you wrote this in 2006? In 2008 they nearly did collapse world economies and they are about to do it again by trying to balance the budget on the backs of the poor and wage earners.

They really do believe the “raise the minimum wage and unemployment goes up” idea. That is why they are so opposed to letting Obama reduce payroll taxes. If wage earners get more take home income, that is just like raising wages and so it just has to cause more unemployment.

]]> By: ezra abrams http://www.overcomingbias.com/2006/11/the_big_four_ec.html#comment-498215 ezra abrams Sat, 27 Aug 2011 21:05:51 +0000 http://prod.ob.trike.com.au/2006/11/are-the-big-four-econ-errors-biases.html#comment-498215 Foreign Bias Since economist, in general, benefit from foreign competition (cheap TVs, cheap food from chile, etc) and they don't get competiton for their jobs, perhpas it is the economists who are biased. make work the day computers start teaching econ courses, and economists get laid off, economists will find deep theoretical reasons why technology is bad Markets do you really believe tht companies don't collude ? If you do, I have a bridge in brooklyn i can sell you cheap Pessimistic Bias is actually correct, in a lot of ways. Foreign Bias
Since economist, in general, benefit from foreign competition (cheap TVs, cheap food from chile, etc) and they don’t get competiton for their jobs, perhpas it is the economists who are biased.

make work
the day computers start teaching econ courses, and economists get laid off, economists will find deep theoretical reasons why technology is bad

Markets
do you really believe tht companies don’t collude ? If you do, I have a bridge in brooklyn i can sell you cheap

Pessimistic Bias
is actually correct, in a lot of ways.

]]> By: Jain http://www.overcomingbias.com/2006/11/the_big_four_ec.html#comment-424281 Jain Wed, 19 Dec 2007 03:17:40 +0000 http://prod.ob.trike.com.au/2006/11/are-the-big-four-econ-errors-biases.html#comment-424281 Bryan Caplan has found that it is easy to explain people by claiming they are irrational. Easy, but unproductive. It is difficult to find economic answers to questions if one assumes that the agents are acting against their own best interests. I do not claim that economics has all of the answers, but shouldn't we continue to try to explain these phenomona under the assumption of rationality? How about this. In each case, the people making these arguments are acting in their own best interest. Sure, none of these policies are in the long-run interest of the country, but who, outside of university faculty, have the job security that allows them to put the long run (i.e. infinite horizon, overlapping generations, etc.) ahead of the short run. In the short run, politically, most people must fight to make sure the human capital they spent decades accumulating maintains its value. This leads to anti-foreign, make-work, and anti-market bias. The pessimistic bias is defensive. Politically, it is always good to give others the impression you are willing to fight to keep what you have. The best way to convince people of this is to tell them how bad things are. It seems that people are rational (and not biased), but Caplan is urging them to put their own best interests aside and push for programs that will help economic growth and future generations. If they acted accordingly, what economic model would explain that behavior? I think, it is then that we would have to put our economics aside and look for explanations based in irrationality. Bryan Caplan has found that it is easy to explain people by claiming they are irrational. Easy, but unproductive. It is difficult to find economic answers to questions if one assumes that the agents are acting against their own best interests. I do not claim that economics has all of the answers, but shouldn’t we continue to try to explain these phenomona under the assumption of rationality? How about this. In each case, the people making these arguments are acting in their own best interest. Sure, none of these policies are in the long-run interest of the country, but who, outside of university faculty, have the job security that allows them to put the long run (i.e. infinite horizon, overlapping generations, etc.) ahead of the short run. In the short run, politically, most people must fight to make sure the human capital they spent decades accumulating maintains its value. This leads to anti-foreign, make-work, and anti-market bias. The pessimistic bias is defensive. Politically, it is always good to give others the impression you are willing to fight to keep what you have. The best way to convince people of this is to tell them how bad things are. It seems that people are rational (and not biased), but Caplan is urging them to put their own best interests aside and push for programs that will help economic growth and future generations. If they acted accordingly, what economic model would explain that behavior? I think, it is then that we would have to put our economics aside and look for explanations based in irrationality.

]]> By: Trade Diversion http://www.overcomingbias.com/2006/11/the_big_four_ec.html#comment-424282 Trade Diversion Mon, 29 Jan 2007 17:43:31 +0000 http://prod.ob.trike.com.au/2006/11/are-the-big-four-econ-errors-biases.html#comment-424282 <strong>NYT: "The U.S. Is Losing Market Share. So What?"</strong> Prosperity and economic logic contend with a bit of hysteria and xenophobia: The United States is losing market share in the global economy, and that is not necessarily a bad thing... Ultimately, the decline of economic pre-eminence may be more damagin... NYT: “The U.S. Is Losing Market Share. So What?”

Prosperity and economic logic contend with a bit of hysteria and xenophobia: The United States is losing market share in the global economy, and that is not necessarily a bad thing… Ultimately, the decline of economic pre-eminence may be more damagin…

]]> By: lollerkeet http://www.overcomingbias.com/2006/11/the_big_four_ec.html#comment-424280 lollerkeet Fri, 15 Dec 2006 03:21:22 +0000 http://prod.ob.trike.com.au/2006/11/are-the-big-four-econ-errors-biases.html#comment-424280 (Crossposted from http://blog.sciam.com/index.php?title=which_is_more_plausible_string_theory_or&more=1&c=1&tb=1&pb=1&ref=rss) Physicists have more credibility. Physics is a science. The pronouncements of physicists are testable and falsifiable. Economics as it stands today is little more than an extension and justification of big business. Economics more closely resembles creationism than science. The fact thabt creationists have been maintaining the same line for years does not make them more credible - it does the opposite. (Crossposted from http://blog.sciam.com/index.php?title=which_is_more_plausible_string_theory_or&more=1&c=1&tb=1&pb=1&ref=rss)

Physicists have more credibility. Physics is a science. The pronouncements of physicists are testable and falsifiable.

Economics as it stands today is little more than an extension and justification of big business. Economics more closely resembles creationism than science. The fact thabt creationists have been maintaining the same line for years does not make them more credible – it does the opposite.

]]> By: conchis http://www.overcomingbias.com/2006/11/the_big_four_ec.html#comment-424279 conchis Mon, 11 Dec 2006 17:17:07 +0000 http://prod.ob.trike.com.au/2006/11/are-the-big-four-econ-errors-biases.html#comment-424279 Isn't this perfectly rational Bayesianism? People come to economics with stronger priors than they do to physics. Given that, it seems unsurprising that they update their beliefs more slowly for the former than the latter. Isn’t this perfectly rational Bayesianism? People come to economics with stronger priors than they do to physics. Given that, it seems unsurprising that they update their beliefs more slowly for the former than the latter.

]]> By: Robin Hanson http://www.overcomingbias.com/2006/11/the_big_four_ec.html#comment-424278 Robin Hanson Sun, 10 Dec 2006 01:41:01 +0000 http://prod.ob.trike.com.au/2006/11/are-the-big-four-econ-errors-biases.html#comment-424278 Wells and Flathead, in every economics course I discuss ad naseum differences between simple supply and demand and the real world. You would hear the most about employment in a labor economics course. Friction is a very simple concept, appropriate for a 101 course; it is hardly a exhaustive list of all things wrong with simple physics models. Wells and Flathead, in every economics course I discuss ad naseum differences between simple supply and demand and the real world. You would hear the most about employment in a labor economics course. Friction is a very simple concept, appropriate for a 101 course; it is hardly a exhaustive list of all things wrong with simple physics models.

]]> By: Wells. http://www.overcomingbias.com/2006/11/the_big_four_ec.html#comment-424277 Wells. Sat, 09 Dec 2006 19:58:17 +0000 http://prod.ob.trike.com.au/2006/11/are-the-big-four-econ-errors-biases.html#comment-424277 I'd like to hear professor hanson's response to Flathead. I’d like to hear professor hanson’s response to Flathead.

]]> By: Joel W http://www.overcomingbias.com/2006/11/the_big_four_ec.html#comment-424276 Joel W Wed, 06 Dec 2006 02:54:17 +0000 http://prod.ob.trike.com.au/2006/11/are-the-big-four-econ-errors-biases.html#comment-424276 Professor Hanson: Fair enough. The sign of the change in unemployment from a $2 an hour minimum wage increase isn't an issue that most people care about, compared to the magnitude. As Ezra Klein points out, people care about pronouncements by economists that are going to affect their lives. Perhaps the people who care the most about signs without magnitudes are graduate students working through comparative statics problems... Professor Hanson: Fair enough. The sign of the change in unemployment from a $2 an hour minimum wage increase isn’t an issue that most people care about, compared to the magnitude. As Ezra Klein points out, people care about pronouncements by economists that are going to affect their lives. Perhaps the people who care the most about signs without magnitudes are graduate students working through comparative statics problems…

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