Sometimes financial journalism really irks me. In this story, NPR asks if the United Potato Growers of America has become, "a veritable OPEC of spuds." Yet, clearly the questions, correctly specified, is whether its the rise of PotatOpec. Boom! Nailed it!
Monday, January 6, 2014
Economics and Finance are often criticized for not knowing enough. The perception is that we haven't made enough progress on fundamental questions. I've always wondered what the right amount of progress is supposed to be. Some questions are hard to answer. Thus, I'm always struck by scientific debates over seemingly fundamental questions. Recently, at the new Perot Museum of Nature and Science in Dallas, I was struck by an exhibit explaining that scientists still disagreed about the moon's origins.
Wikipedia has more information. Consensus seems to be forming around the view that the moon was formed in a great impact with a proto-planet, though this view seems to be contradicted by some recent evidence. Suppose this statement had been made about an economics conference, "Before the conference, there were partisans of the three 'traditional' theories, plus a few people who were starting to take the giant impact seriously, and there was a huge apathetic middle who didn’t think the debate would ever be resolved. Afterward there were essentially only two groups: the giant impact camp and the agnostics."
There are partisans of different views, some who think the debate will never be resolved. Much less, this conference was held in 1984 and despite seeming growing consensus, none as been reached. Would a conference today be closer to consensus? Would it be farther? Would the consensus views have fragmented into divergent views of what the Great Impact Hypothesis means?
My point is only that learning things is difficult. In some cases, the answer may be that some phenomenon is a random process and the most we could ever hope to learn about it is a probability distribution. That seems to be perfectly acceptable to the general public when a physicist cannot predict where an electron will be, but unacceptable when an economist cannot predict future movements of the economy or stock market.