[HN Gopher] A First Lesson in Econometrics (Paper) [pdf]
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A First Lesson in Econometrics (Paper) [pdf]
Author : hkc
Score : 100 points
Date : 2022-01-04 17:26 UTC (5 hours ago)
(HTM) web link (www.uibk.ac.at)
(TXT) w3m dump (www.uibk.ac.at)
| lowkeyokay wrote:
| This was made me laugh. So many times I read 'it should then be
| obvious that...' What the?! No it isn't. Text book authors must
| hate students.
| kurthr wrote:
| It is obvious to the "_most_ casual observer"... you need to
| get quite a bit more casual!
| xtiansimon wrote:
| Isn't there a thing about how mathematicians and scientists in
| the 19th century would carefully explain as if the intended
| audience we're laypeople. Where as in the 20th century academic
| writing and popular science writing diverged such that an
| academic writer could say such and such is obvious and be
| speaking to a very niche audience?
| AnimalMuppet wrote:
| I heard of a prof who in a lecture said "It's obvious
| that..." and a student challenged him on it. "Is that really
| obvious?" The professor looked at the board for a minute,
| then left the room. _45 minutes later_ , the professor came
| back and said, "Yes, it's obvious!"
|
| You keep using that word. I do not think it means what you
| think it means...
| [deleted]
| bachmeier wrote:
| My monetary economics professor in grad school was teaching a
| paper and told us that when the authors claim it's obvious,
| that means it's not obvious. So he wrote out the derivation
| over the weekend and gave us a four-page, single-spaced handout
| with all the equations behind that single "obvious" result.
| cinntaile wrote:
| This result is trivial so the derivation is left as an
| exercise.
| boppo1 wrote:
| This is way off topic but hopefully it will get allowed
| because I think you have the expertise to help:
|
| It seems to me that the widely accepted practice of market
| stimulation by interest rate intervention has the cost of
| destroying price discovery. Also, that it is a primary cause
| of wealth inequality. These relationships seem to me actually
| obvious: push down DCF denominators and valuations go up,
| inefficient businesses stay in business and employ people
| digging holes. Sure, we get good jobs reports, but we also
| work harder to make less. Meanwhile those who hold wealth see
| its value increase disproportionate to 'actual' worth and
| common people who hold little or none can afford less and
| less of it. It seems like a pretty direct policy of 'rich get
| richer, poor get poorer'. Worse yet, as I look at the world
| around me, it all seems to support my hypothesis. Tesla,
| spacs, NFTs, housing, blackrock & vanguard & gates buying
| land, etc. I could go on and on with examples.
|
| But the thing is, I got shitty grades in my college econ
| courses. It's laughable to me that all the highly educated
| people at central banks somehow haven't thought of this but
| _I_ have. I 'm being serious, I'm kind of a lazy idiot. By
| any reasonable measure, I expect that I'm wrong.
|
| Could you point me in the direction of some primary sources
| that address the relationship between interest rate
| intervention and price discovery? I've been told to pick up
| an undergrad macro text, but those all just seem to say "low
| rates = easier to get loans = mo' jobz" without any rigor.
|
| Open market ops and other interventions are so common and
| accepted, the only other people I see complaining are
| precious metals schizos. Surely there's a theoretical
| foundation for the policy/practice.
| ElDji wrote:
| Having followed engineering cursus THEN economics with econometry
| courses : this was the most WTF moments of my life.
| rluoy wrote:
| It seems that ! is missing in equation (12).
| Pietertje wrote:
| And the power to delta
| hkc wrote:
| Right! Here's an updated version with corrections:
| https://www.latrobe.edu.au/__data/assets/pdf_file/0004/25186...
| photochemsyn wrote:
| Econometrics is one of the most discredited branches of academics
| that exists. These were the people who were waving their models
| around in the early 1990s, trying to tell people that NAFTA would
| have no effect on manufacturing jobs in the United States. They
| also promoted elimination of Glass-Steagall and the deregulation
| of the housing market, resulting in the subprime fraud-based
| economic disaster of 2008.
|
| There's a reason the neoclassical economists are hidden away in
| business schools, not in the actual science departments - it's
| because they'd have to endure the ridicule of anyone with basic
| training in science and math. When your models predict the
| opposite of what actually occurs, time and time again, well,
| you're supposed to recognize that there are fundamental flaws in
| them and go back to basics.
|
| Imagine if, in the late 1970s, all the climate researchers had
| predicted several decades of global cooling thanks to human
| activity, and had turned out to be entirely wrong, yet made no
| effort to re-examine their basic assumptions about how the world
| works. That's what neoclassical economists are doing with their
| econometric model nonsense.
| hwers wrote:
| This is probably true but it's quite an angry response to the
| linked article which is mostly just a joke.
| barrenko wrote:
| Not sure why you're downvoted.
| bachmeier wrote:
| Likely because it's a confused comment not having any
| relationship to the posted article, and it demonstrates lack
| of even a basic understanding of what econometrics is.
| (Source: I teach econometrics classes in a college of arts
| and sciences, which I share with math, statistics, physics,
| chemistry, and biology departments.)
| huitzitziltzin wrote:
| This comment is totally uninformed and completely wrong.
|
| Econometrics is the study of making inferences about economic
| models from data. Making inferences from data is fundamental to
| everything economists have done for a long time.
| Econometricians are essentially applied statisticians. Indeed,
| I can think of many econometricians I personally know who have
| joint appointments in university statistics departments. Your
| claim that they are "hidden in business schools" is completely
| incorrect.
|
| Econometricians are unlikely to have made predictions about
| NAFTA. You provide no source for your claim that they did. Nor
| are they likely to have advocated against Glass-Steagall. You
| provide no evidence for this claim either.
|
| If you think econometricians have no training in science or
| math, you are also totally and completely wrong. (Again: do you
| think so many econometricians would have joint appointments _in
| statistics departments_ if that were true?)
|
| I would also invite you to visit _any_ seminar in a prominent
| university economics department in the United States, not just
| the econometrics seminar. Outside of pure game theory, every
| seminar series in every department is thoroughly empirical:
| what is the data, how are the parameters in the model
| identified, etc.
|
| Or go talk to the economists who work at any of the large tech
| firms! Facebook, Google, and Amazon all have economics groups.
| Amazon's is to my knowledge the largest. They hire many
| econometricians every year _and_ have consulting relationships
| with many of the leading academic econometricians. Would they
| put so much money into "one of the most discredited branches
| of academics that exists"? No, they would not.
|
| You don't have the slightest idea what you are talking about.
| photochemsyn wrote:
| 'Econometric models' have so many levers and dials on them
| that they be tuned to forecast whatever their operator wants
| them to forecast. Hence they mainly serve as a marketing tool
| to defend policies that their sponsors desire to get through
| Congress or the next board meeting or whatever.
|
| As far as things like model projections for NAFTA, any
| relatively simple search turns up dozens of references.
| Google Scholar isn't all that bad for this, select a custom
| range 1990-1994 and enter "econometric model 1992 NAFTA
| projections". There are dozens of results. For example:
|
| Appendix B, Macroeconomic Simulations of NAFTA
| https://www.cbo.gov/sites/default/files/103rd-
| congress-1993-...
|
| You can find the same for those seeking to justify the China
| WTO deal c.2000 but I don't recall reading much about
| forecasts of creating something called 'the Rust Belt' all
| across the once-industrial zone covering a third of the US,
| or the resulting job losses and economic regional malaise.
| Perhaps something is missing in the models?
| civilized wrote:
| Econometric models are mentioned twice in that paper, and
| only to note that they are generally not used and will not
| be used in the present study.
| crimsoneer wrote:
| This is silly. Econometrics is the basis for much of what we
| now call data science, and good causal inference. It has bugger
| all to do with nafta.
| lvl100 wrote:
| I think you're mainly focusing on macro and it's not completely
| unwarranted. That said, micro stuff is fascinating to say the
| least, and very pertinent to data science. In fact, much of
| "data science" projects until 2012-13ish were handled by
| economists.
| SantalBlush wrote:
| They're not just focusing on macro, they are confusing
| econometrics with economics. Econometrics has nothing to do
| with any specific economic theory; it is about statistical
| modelling.
| motohagiography wrote:
| Funny, now do epidemiology.
| maccam912 wrote:
| Was pleasantly surprised to find it a short humorous paper. If
| you want to learn econometrics, this will do more to prepare you
| for reading other papers than teach you anything.
| hkc wrote:
| You're right! It was a fun paper that I discovered while
| studying Econometrics in undergrad.
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