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Friday, September 29, 2006

Comments

John Quiggin

I always encourage Honours and PhD students to start with a replication exercise, if only to impress on them how difficult it is.

A. PERLA

Are we talking about "economist replicants", as in the Blade Runner film?

Now, THAT is an interesting thought! Built-in data gathering and regression analysis programs.

Wow! (; ^ )

AJE

In our Econometrics class we had to do a replication. I replicated a replication, and couldn't verify either!

Laurent GUERBY

Well, if one looks at the current inflation measure "debate" on economics blog (and of the past decades...), it's clear that if BLS raw price data was available the "debate" would become a bit more like science and a bit less faith-based or anecdote-based.

First rule of economics: never publish your data. People who don't trust you are just people who don't understand economics. Enough said!

Hope that attitude will change at some point, there are very interesting and very hard problems in economics, more reasons to (re)use what has been learned in hard sciences.

A. PERLA

Guerby : "it's clear that if BLS raw price data was available the "debate" would become a bit more like science and a bit less faith-based or anecdote-based."

Oh, how so? You track the data and then try to explain it. The result is still subjective because objective explanations remain interpretative ... and therefore subjective. (Why do you think that all the economists in the world, set head to foot, still couldn't reach a conclusion. Joke! ;^)

Economics is first and foremost an empirical science, and empirical evidence, I suggest, since it is observational, remains interpretive (as we try to bend it into a "theory".)

A graph of raw price data will stimulate as many opinions explaining its behaviour as there are observers. A regression may give a trend line that history has shown highly variable depending upon the period in question. Look at what happened to the "Philips curve" in another post, over a period of a few decades ...

A. PERLA

Post scriptum: And, as regards econometric forecasting models ... I've wasted company money on a good many. The survey in the Economist is for free and does just as well at a macro level ...

Laurent GUERBY

A. PERLA, first it's obvious there's no magic inflation number representing honestly the situation of every single person, so there will always be a subjective judgement to make so I'm in agreement with you here :).

Then the question is for each one interested in having some case-specific inflation measure, how do you obtain one? Simple answer: publish the data collected using taxpayer money and let the market provide appropriate inflation numbers.

For example some countries do reevaluate pensions or state welfare based on CPI. But is it optimal to reevaluate old people pensions with the same number as young single mother welfare? Their cost are probably widely different as is their effective inflation. Same thing for geographic and lifestyle differences.

Do we agree?

Rob Elliott

Excellent post - we have linked to it from our blog "http://globalisation-and-the-environment.blogspot.com/". This issue will only increase in importance and it is good to see that the top economics journals are moving in that direction. A recent talk/paper by David Card also touches on this issue when he discusses the future of labour economics.

Scott Peterson

I think that your closing quote would best be restated by saying that "For economics to at last become a science, the profession must embrace the scientific method by archiving and sharing data and program code"; note that I left out the word "empirical". For economics to be referred to as a science, period, no theory can be accepted unless research backing up said theory is found to be replicable.

Arthur Eckart

There's good and bad science. Empirical economics has often proven conventional wisdom or intuitive thinking was wrong. However, it has also been (mis)used for biased outcomes.

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