NationStates Jolt Archive

I'm looking to find any empirical verification of classical macroeconomic theory as generally talked about. I just was reading through a chapter of a book written by an economist where he was blathering on about how the public is irrational because the public doesn't agree with economists, and was going on to talk about how all economists think free trade is good, etc etc.

I'm particularly interested in any attempts to verify, empirically, the following common "lassez faire" claims, which I keep hearing that economists support:

The less regulation a country places on its markets, the faster that country's economy will grow.
Fewer trade barriers mean faster economic growth.
Lower taxes mean faster economic growth.
More progressive taxation inhibits growth.
Monopolies will fall apart on their own if the government does not step in. I.e., monopolies are an unstable equilibrium.
Planned economies fail.
Socialized medicine is inefficient.
Privatized medicine is efficient.
Minimum wage increases lead to a decrease in living standards, less economic growth, and higher unemployment.
Markets will self-regulate.

Empricial verification of other notable claims made under the aegis of classical "lassez faire" economists is also welcome. I may not have covered everything.

You should post this on Beta as well, cos it looks interesting.

You should post this on Beta as well, cos it looks interesting.
Done.

I think you need to define exactly what you're after in terms of "empirical verification". I could go through the effort and put together a bibliography (actually, I probably couldn't, given that I've got exams coming up), but first it might be good to know exactly what constitutes "verification" in your eyes.

Done.

I'd noticed. I didn't want it to just die on here.

Has anyone noticed that all these "economists are wrong" threads have started springing up just as the economists-predicted crisis started to kick in?

Has anyone noticed that all these "economists are wrong" threads have started springing up just as the economists-predicted crisis started to kick in?

The economists predicted the crisis? Do you have a link? I thought it was a crisis because it was unexpected.

As for the OP, I doubt much empirical evidence will be forthcoming. In my layperson's opinion, it seems as if the historical record is indicating that the CLFE claims with respect to medicine are wrong, as the more socialised systems seem to operate more efficiently than the more privatised systems.

The economists predicted the crisis? Do you have a link? I thought it was a crisis because it was unexpected.


Quite a few did actually. Even Ron Paul, HA! Although he's not really an economist. Many did, some have milked it (see Roubini). Even a whole school of economics did, but they are are a bit nutty and insignificant (the Austrain school), but are becoming more significant.


As for the OP, I doubt much empirical evidence will be forthcoming. In my layperson's opinion, it seems as if the historical record is indicating that the CLFE claims with respect to medicine are wrong, as the more socialised systems seem to operate more efficiently than the more privatised systems.

To be honest, the crisis is quite beyond simple socialised vs unsocialised markets, it's just a little irrelevant. It was specific nuances that caused the crisis, the highly complex and multilayered global banking system had many problems, but the people looking at these problems weren't thinking about simple left and right wing ideologies.

To the OP, you are talking about a specific group of people who support a specific political ideology. Not economists as a whole.

The economists predicted the crisis?
Have you been hiding under a rock for the past 2 years? Since early 2007, that's all they've been talking about.

Not many had the precise moment caught - if anyone could, they would become a billionaire in an instant - but nearly every 2007-2008 economics publication was filled with mentions of and prognoses for the forthcoming recession.

Quite a few did actually. Even Ron Paul, HA! Although he's not really an economist. Many did, some have milked it (see Roubini). Even a whole school of economics did, but they are are a bit nutty and insignificant (the Austrain school), but are becoming more significant.


I don't think the Austrians really count. They seem to always be predicting about a crisis under the economic system we currently have, much like Marxists. Even taking the relative mainstream is prone to seeing crises given the old cliche that economists have predicted 9 out of the last 5 recessions and those mistakes were duzies. (http://www.barrypopik.com/index.php/new_york_city/entry/wall_street_indexes_predicted_nine_out_of_the_last_five_recessions/)

Have you been hiding under a rock for the past 2 years? Since early 2007, that's all they've been talking about.

Not many had the precise moment caught - if anyone could, they would become a billionaire in an instant - but nearly every 2007-2008 economics publication was filled with mentions of and prognoses for the forthcoming recession.

From what I have seen the crisis is generally seen as having started in 2007, not recently.

Have you been hiding under a rock for the past 2 years? Since early 2007, that's all they've been talking about.

Not many had the precise moment caught - if anyone could, they would become a billionaire in an instant - but nearly every 2007-2008 economics publication was filled with mentions of and prognoses for the forthcoming recession.

...From what I have seen the crisis is generally seen as having started in 2007, not recently.

In early 2007, the morning news show that I listen to was talking a lot about the huge rise in the price for gas. Many economists were predicting that the price of gas was never going to get below $50.00 a barrel again, which probably would have been correct, if it had not been for the financial crisis that occurred later.

In other words, I have heard many economists discuss the crisis, but I was under the impression that the majority of economists did not predict it.

Here's a bit of a piece of knowledge, exclusive to the jolt forum and from inside the discipline.

We laugh at the fact that people think we can predict the future. We can't, and we don't really claim we can. Don't tell anyone, but the fact that people give economists money in return for peace of mind is actually a giant scam of ours designed to punish irrational behaviour.

Here's a bit of a piece of knowledge, exclusive to the jolt forum and from inside the discipline.

We laugh at the fact that people think we can predict the future. We can't, and we don't really claim we can. Don't tell anyone, but the fact that people give economists money in return for peace of mind is actually a giant scam of ours designed to punish irrational behaviour.

I KNEW it! You devious little free-market minxes.