Economic models do not, and never can, fully reflect the extraordinary complexity of human markets. The point is to create useful abstractions to provide decision-makers with a sense of the budgetary and economic impacts of a given policy proposal.
While Marx never devoted a specific work to a discussion of life after capitalism, his distinctive critique of the central realities of capitalism is far more liberatory than has generally been appreciated.
Highly stylized output of models that assume supply-constraints on growth are the norm, and which are presented as effects on “growth” and “jobs” with no further context are notably unuseful, and often actively misleading in today’s policy debates.
A recent “Spreadsheet Scandal” has rocked the economics world. It has eliminated the last remaining technical argument in support of the President’s “chained CPI” Social Security cut. Earlier this year the IMF admitted they had made errors in their modelling of expenditure multipliers. Now, the darlings of the austerity cultists – Rogoff and Reinhart – has been exposed for errors in spreadsheet coding. Who is ever going to take responsibility for these travesties?
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