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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (3224)	4/24/2001 1:48:29 PM
From: MeDroogies	Respond to of 74559

Good quote. Unfortunately, all to common. Because the nature of economics is based on the study of previous situations and crises, and it is nearly impossible to set up lab experiments to test hypotheses (although computers are now getting powerful enough to come close to provide a good test environment), economists have long found succor in the fact that science is meant to explain, and not predict. The fact that most standard sciences CAN predict the outcome of events is based on the ability to control environments and inputs. This isn't a luxury economists are typically accorded. As a result, the most common types of economic information that you'll get (and even that will be tainted by political diatribes) are after the fact explanations, and descriptions of current events. When it comes to predicting, it is still very much a black art, and those who are successful get lauded (until they get it wrong - like AG). Since much of what I do is based on models, I like the varied outcomes that I'm able to conjure up...it leaves room for flexibility as time progresses. This is contrary to Truman's jest of finding the one handed economist. Most people want something succinct and definitive. I prefer room to maneuver, because nothing is ever, unfortunately, succinct and definitive. You can glean much and predict much using broad strokes. However, economies deal in what are called "sensitive dependence on initial conditions"...otherwise known as the "butterfly effect" in chaos theory. A 2% change in a monetary figure that represents 1% of the GDP (otherwise noted as a .0002 of GDP) seems insignificant. And first time around, it may be....but as time progresses, its impact may grow (or diminish, depending on what that figure is) until it comes to alter fully 1% of the GDP.