Eva Durant wrote,
>yes, i stopped reading it when lot of the variables were
>arbitrarily called constants, when most of them never are.
>Too many people are already causalties of the
>present economics, I think acting earlier is better,
>whereever is the alleged point of inflection,
>I have the feeling you wont find two econoomists
>who agree where to put it anyway... exactly because of
>the arbitrary nature of similar "equations".
>
>I am not convinced that such mathematical
>modelling of social "data" can be as useful as modelling
>in physics. There are very few unconvoluted
>independent/dependent variable relations.
This makes it even more paradoxical when the measurable quantities that do
exist are so readily -- one should say willfully -- ignored, even denied.
For example, we can document from birth statistics the appoximate size of
various age cohorts in developed countries. It's not at all hard to go from
there to estimates of changes in the working age population and changes in
the retirement age population.
Although such an demographic estimate doesn't directly provide an estimate
of potential funds available for retirement savings, it does tell us
something about the demographic parameters within which the flow of funds
into or out of retirement accounts operate. We know, for example that
working age people (roughly 20-64) are more likely to contribute to
retirement savings and people over the age of 65 are more likely to withdraw
from those funds. Although this is not a certainty, it is a measurable
probability.
Seventeen years ago, I worked at a school board where the officials were
convinced that "declining enrollment" was an inexhaustible trend. A quick
call to the department of vital statistics could have confirmed that in a
few years school enrollments would again start to increase. But there was no
place in the official methodology for factoring in "outside" data.
Everybody operates according to some sort of model, whether mathematically
sophisticated or not. I would contend that each of these models is
"mathematical" -- even if the math is no more than a crude dichotomy
("there are two kinds of people . . .").
You're correct that John Burr Williams called a lot of things "constants"
that aren't constant. But what he was doing wasn't arbitrary. He was naming
a set of "simplifying assumptions". That is, he was trying to make it clear
to the reader exactly where the estimates (based on the hypothetical
constants) would most likely deviate from reality.
Regards,
Tom Walker
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