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Monday, March 19, 2007

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Stephen Gordon

As if business people could know better than economists why they behave.

No doubt they do. But is there any reason to believe that they'll tell the truth, if asked?

Gabriel M.

Well, it depends... many ideas we have about ourselves are self-serving.

Managers DO cut wages. They do it by increasing turnover and hiring new people at lower wages. Yes, renegotiating with existing employees sends the wrong signal and can have unpleasant implications (employees talk to each other, etc.).

Also, the title is overly bombastic. Case studies and story-telling are nothing new. Really! And they won't replace VARs and other serious quantitative methods and econometrics.

Scott Peterson

"observation-less theorizing" was if I recall from philosophy class the Aristotelian method of reasoning; which held back science for a thousand years if not more. It took someone with courage like Galileo to actually look out into space and reason based on observation to propel Western science into its successful modern era. Based on the information in your post and the later post about lack of use of non-linear math among economists, I would say that academic economics is the epitome of ivory-tower uselessness.

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