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02:19 PM on 12/05/14 
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Nuns On A Bus
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I disagree. To the extent that normative economic analysis is the application of optimization theory to human issues, there's no reason that the maximand must be GDP.* In principle, there's nothing stopping economists from writing down models that incorporate environmental quality or measures of civil liberties.
In my case at least we did the bolded in my environmental economics class I took. I still think that measuring civil liberties is not an economic issue, and I don't see how or why you could incorporate that into any economic model when there are already frameworks for measuring those in other social sciences. For civil liberties you can go over to Freedom House and see how they rank countries. Yet I don't see how you can even make something so abstract and subjective as "civil liberties" and graph or model them in the same way that you can GDP or supply/demand. Does something in economics offer them a particular framework that you want added to the discussion? You're right that nothing is stopping them from writing those models, but what would they add even if they did?

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That being said, you've touched on the important point that economists can and should work more often with scientists from other disciplines - environmental scientists, geographers, sociologists, and even linguists - and draw on their expertise. There's a tendency within the profession to shun qualitative analysis, and I think it's ultimately detrimental both to the field itself and its ability to do good in society.

*Okay, that's being a little loose with things. Generally, in macroeconomic models, you have firms maximizing profits and consumers maximizing utility, and then you put them together and solve for a competitive equilibrium. Maximizing GDP is more of a social planner's problem.
I agree that they should work across disciplines, but that goes for anyone in the social sciences. Honestly I'd say maximizing GDP is an economist's problem, since you can do that mathematically. Maximizing GDP isn't a social problem. However, once you start looking at the implications of that GDP growth, it becomes a political problem, ie how do we redistribute this wealth (or not). Or for another example, rent controls. Rent controls hurt housing availability, which is what an economic analysis of them would say. The question of whether or not that drop in housing availability is worth keeping rent low for low income people is a political question.
05:34 PM on 12/05/14 
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Merve
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In my case at least we did the bolded in my environmental economics class I took. I still think that measuring civil liberties is not an economic issue, and I don't see how or why you could incorporate that into any economic model when there are already frameworks for measuring those in other social sciences. For civil liberties you can go over to Freedom House and see how they rank countries. Yet I don't see how you can even make something so abstract and subjective as "civil liberties" and graph or model them in the same way that you can GDP or supply/demand. Does something in economics offer them a particular framework that you want added to the discussion? You're right that nothing is stopping them from writing those models, but what would they add even if they did?

I agree that they should work across disciplines, but that goes for anyone in the social sciences. Honestly I'd say maximizing GDP is an economist's problem, since you can do that mathematically. Maximizing GDP isn't a social problem. However, once you start looking at the implications of that GDP growth, it becomes a political problem, ie how do we redistribute this wealth (or not). Or for another example, rent controls. Rent controls hurt housing availability, which is what an economic analysis of them would say. The question of whether or not that drop in housing availability is worth keeping rent low for low income people is a political question.

I think you're operating off a fairly narrow view of what constitutes "economics." The field isn't always about writing down a model and maximizing some objective function subject to constraints (though, as I stated earlier, there's nothing stopping you from doing that). Much of it is applied econometric work, and for political economists, that can involve looking at indices of civil liberties and using them as regressors to determine whether or not they have causal impacts on various economic indicators (or vice versa).

As for your rent-control example, you've outlined what is implicitly a partial equilibrium analysis. It's a nice illustrative example for demonstrating the within-market effects of price controls, but its practicability is limited to undergraduate micro textbooks. (I know it from Varian's textbook.) A dozen other questions arise from the question of rent controls: Where will the people who can't find housing live? What about public housing? How will this affect the markets for other goods and services in the area? These are all questions that economists can and do answer.
07:12 PM on 12/05/14 
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loveisdead
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I love when this thread has good discussion.
12:58 PM on 12/06/14 
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I think you're operating off a fairly narrow view of what constitutes "economics." The field isn't always about writing down a model and maximizing some objective function subject to constraints (though, as I stated earlier, there's nothing stopping you from doing that). Much of it is applied econometric work, and for political economists, that can involve looking at indices of civil liberties and using them as regressors to determine whether or not they have causal impacts on various economic indicators (or vice versa).
Well I'll be the first to admit I never took any econometrics classes, I stuck mostly to micro and international trade classes in the studies I did.

Hmm. For me, political economy almost by definition is an interdisciplinary science. I know I always learned about it in Political Science classes, not Economics classes. When the assumptions usually made in economics start getting applied to issues outside of economics itself I get much more skeptical. As you said, there's nothing stopping them from writing those models, but I still don't see what in particular they would add to the discussion that hasn't already been examined by the other social sciences. Political economy can have very different meanings depending on who is using the term.

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As for your rent-control example, you've outlined what is implicitly a partial equilibrium analysis. It's a nice illustrative example for demonstrating the within-market effects of price controls, but its practicability is limited to undergraduate micro textbooks. (I know it from Varian's textbook.) A dozen other questions arise from the question of rent controls: Where will the people who can't find housing live? What about public housing? How will this affect the markets for other goods and services in the area? These are all questions that economists can and do answer.
I was just using that as an example to illustrate my point, I wasn't trying to get into the specifics of rent control lol. My main point was to illustrate the difference, in my view, between an economic argument and a political one. The economic analysis says that it would lower housing availability in the area where the control is in place, and the political analysis asks whether that's okay due to the other circumstances. I suppose you could measure that abstractly with MWTP or some other metric to try to see if the people in the market come out higher on utility, but those are all such vague metrics dependent on so many assumptions that I wouldn't take an economic analysis of the situation as particularly useful outside of a classroom.
01:14 PM on 12/06/14 
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Hmm. For me, political economy almost by definition is an interdisciplinary science. I know I always learned about it in Political Science classes, not Economics classes. When the assumptions usually made in economics start getting applied to issues outside of economics itself I get much more skeptical. As you said, there's nothing stopping them from writing those models, but I still don't see what in particular they would add to the discussion that hasn't already been examined by the other social sciences.
But where do you draw the boundaries on what constitutes "economics" and what doesn't? Is a game-theoretic model of voting or social choice not "economics"?

I was just using that as an example to illustrate my point, I wasn't trying to get into the specifics of rent control lol. My main point was to illustrate the difference, in my view, between an economic argument and a political one. The economic analysis says that it would lower housing availability in the area where the control is in place, and the political analysis asks whether that's okay due to the other circumstances. I suppose you could measure that abstractly with MWTP or some other metric to try to see if the people in the market come out higher on utility, but those are all such vague metrics dependent on so many assumptions that I wouldn't take an economic analysis of the situation as particularly useful outside of a classroom.
I don't really understand this point of view. You're essentially saying that quantitative policy analysis isn't useful.

I think we might just be debating the semantics of what constitutes "economics" versus other social sciences. I think we'd probably find more common ground if we reframed the discussion around "quantitative analysis of social issues."
02:15 PM on 12/06/14 
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But where do you draw the boundaries on what constitutes "economics" and what doesn't? Is a game-theoretic model of voting or social choice not "economics"?
I know it when I see it!

But honestly, I'd say it would depend on the exact situation, I wouldn't say game theory makes it an economic analysis by default. A game theoretic model of voting could certainly fall under a different social science than economics in my view.

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I don't really understand this point of view. You're essentially saying that quantitative policy analysis isn't useful.

I think we might just be debating the semantics of what constitutes "economics" versus other social sciences. I think we'd probably find more common ground if we reframed the discussion around "quantitative analysis of social issues."
Yeah I think we're talking past each other a bit haha. I wasn't trying to say that quantitative policy analysis isn't useful. I'm all for quantitative analysis. However, in my experience examining social issues using economic models they were too abstract to adequately (for me) model human behavior due to the assumptions inherent in them. Even with quantitative analysis of social issues, there isn't going to be an "answer" to the issue.
03:08 PM on 12/06/14 
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Merve
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I know it when I see it!

But honestly, I'd say it would depend on the exact situation, I wouldn't say game theory makes it an economic analysis by default. A game theoretic model of voting would almost certainly fall under a different social science than economics in my view.
My advice would be to pick an economics department from a fairly large school and take a look at what the professors there are actually researching. You might be surprised at what constitutes "economics" for them.
11:50 PM on 12/06/14 
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My advice would be to pick an economics department from a fairly large school and take a look at what the professors there are actually researching. You might be surprised at what constitutes "economics" for them.
My saying that other social sciences can use theories like game theory that were invented by economists or have been used in economics in their work isn't the same as me saying that economics can't also study those things. I shouldn't have said almost certainly, that was just me speaking from my personal experience, I wanted to point out that the fields have influenced each other enough at this point that many theories are used across disciplines. I'm aware that economists look at more than just supply and demand graphs all day, and I'll freely admit to not knowing everything they look at since that isn't my field. Though I do think, going back to what we were talking about earlier, that finding the line between economics and politics is almost impossible given how much the two influence and determine one another.
10:06 PM on 12/17/14 
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Ferrari333SP
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Really interesting article on world oil markets today

Why oil prices keep falling — and throwing the world into turmoil: http://www.vox.com/2014/12/16/740170...prices-falling
10:28 PM on 12/17/14 
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Ferrari333SP
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North Dakota’s quest not to blow its oil wealth: http://www.vox.com/2014/12/11/732801...fracking-money
09:17 PM on 02/16/15 
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Ferrari333SP
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The Miracle of Minneapolis - No other place mixes affordability, opportunity, and wealth so well. What’s its secret?

http://www.theatlantic.com/magazine/...apolis/384975/
06:58 PM on 05/07/15 
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So...I know the graduated payment plan for student loans over 10 years would amount to paying about $900 more over those 10 years IF I make the minimum payments every month. But if I'm looking to pay more (and/or a lot more) than the minimum every month, then I don't think that matters, correct? I just like the idea of having a smaller "monthly expenses" line I have to give a mortgage broker if I look to buy sometime in the next few years, which picking the graduated plan would allow me to do...

Anyone with any experience in this have any thoughts?
02:03 AM on 05/08/15 
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Financial Planning offers educational information on preparing for retirement along with a special section on investing for women. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise. Some financial Analysis in Dubai offers the best financial solutions.
05:41 PM on 05/08/15 
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So...I know the graduated payment plan for student loans over 10 years would amount to paying about $900 more over those 10 years IF I make the minimum payments every month. But if I'm looking to pay more (and/or a lot more) than the minimum every month, then I don't think that matters, correct? I just like the idea of having a smaller "monthly expenses" line I have to give a mortgage broker if I look to buy sometime in the next few years, which picking the graduated plan would allow me to do...

Anyone with any experience in this have any thoughts?
The less you pay a month, the longer you will be paying and that means you will be paying more in interest. Typically it is better to pay more now, so over time you end up spending less. Depending on how much the loan is for and the interest rate you can easily calculate the difference. The lender might also have a tool so you can see how much you paying towards the principal and how much is interest.
04:52 PM on 08/21/15 
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DeviateRogue
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Dow fell what 500 points today?



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