[ExI] Inflation graph

[Anders Sandberg]

On 2013-11-30 11:30, BillK wrote:
> On Sat, Nov 30, 2013 at 8:53 AM, Anders Sandberg  wrote:
>> On 2013-11-30 00:36, Kelly Anderson wrote:
>>
>> Isn't that pretty much the entire field of Economics? If you could predict
>> it, someone would make money off of that prediction, forcing the prediction
>> to not come true.
>>
>>
>> That is a bit of a misunderstanding: it only applies to efficient financial
>> markets. Economics also predicts that if you lower the price of your
>> lemonade, more people will tend to buy it.
>>
> I doubt if you can call that a prediction. (Agreeing with John).
>
> It is a naive observation that if the price is cheaper people can
> afford to buy more.
> The original claim is that *all things being held equal*, lower price
> equals more sales.
> But there are so many exceptions, that it cannot be a prediction. In
> real life all things are never held equal.

Physics is clearly just as crappy. That "law of gravity" clearly has 
loads of exceptions - balloons, birds, clouds. Clearly it cannot make 
good predictions with all those exceptions of buoyancy, drag, the 
Yarkovsky effect and whatnot. And they change it all the time with 
relativistic corrections. Clearly no real life applications. Don't get 
me started on the "science" of biology.

If you really think economics doesn't know anything useful, you should 
be able to make money as well as - or better - than people with economic 
knowledge without having had to pay for all that education. Raise 
prices, value risk at zero, and trade with people with more information 
than you have: you are going to be rich!

(I was thinking of mentioning Giffen goods and similar complications in 
my quick post, but felt that it would detract from the point. 
"Prediction" is a loaded word in the philosophy of science, and comes in 
many kinds and qualities. But supply-demand is a rather solid prediction 
approach.)

-- 
Dr Anders Sandberg
Future of Humanity Institute
Oxford Martin School
Oxford University