Is the supply and demand curve a meme?

Burnblaze
Burnblaze

Is the supply and demand curve a meme?

All urls found in this thread:
https://www.youtube.com/watch?v=TI0V04dP4t8
eGremlin
eGremlin

@Burnblaze
Equilibrium theory is bunk. Prices are actually reflexive.

CodeBuns
CodeBuns

@Burnblaze
These things only exist because it gives economist something to do.

Spazyfool
Spazyfool

@eGremlin
Could you expand on this? There is a lot of reasoning as to why the Equilibrium theory is so prevalent in economics.

@CodeBuns
Is a Bachelors in Economics a meme degree?

massdebater
massdebater

@Spazyfool
Could you expand on this?
What's to expand on? There is absolutely no empirical evidence to support the notion that prices tend toward equilibrium in any time frame. There is, however, evidence to show that prices are reflexive; they are in a constant state of change or fluxuation and tend towards trends.

If you want further reading (or listening, rather) see:
https://www.youtube.com/watch?v=TI0V04dP4t8

Methshot
Methshot

@massdebater
By George Soros
I'll pass on that and find some alternative reading on the same topic but I am interested in what you have said and appreciate it.

they are in a constant state of change or fluxuation and tend towards trends.

This is a normative statement not a positive one.

SniperGod
SniperGod

@Methshot
I'll pass on that
Of course you will.

This is a normative statement not a positive one.
You have that backwards. The empirical evidence (the observable reality) is that prices constantly change and tend towards trends, not reach an equilibrium. The only which could be viewed as having a tendency toward equilibrium is securities as they relate to traditional arbitrage opportunities, but that's the exception rather than the rule.

SniperWish
SniperWish

@Burnblaze
I think it is the same as physicists liking friction-less vacuums.

JunkTop
JunkTop

@SniperWish
friction-less vacuums
Yeah.
That Dyson guy was really on to something.

BunnyJinx
BunnyJinx

@Spazyfool
Is a Bachelors in Economics a meme degree?

That depends where you get your degree.

Economics degrees can be delivered at a really academic standard which involves some decent level of mathematics. However, its also quite easy to dumb down an economics degree.

Personally, I would say that if you are going to a top school, then economics could be a good degree. If you go to a mid tier school, then you would be better off studying maths or physics. The maths is the hard part of economics, the actual concepts arent that difficult. A maths/physics degree will equip you far better than an economics degree from a mid tier uni.

Source - I have an economics degree from a mid tier university.

Booteefool
Booteefool

@BunnyJinx
What would you consider decent level mathematics? Econometrics and calc2?

happy_sad
happy_sad

@SniperGod
The empirical evidence (the observable reality) is that prices constantly change and tend towards trends, not reach an equilibrium.

I think that modern textbook reflect that. Nobody actually believes prices are static I hope.

SomethingNew
SomethingNew

Economics is mostly a meme.

At some point economics wanted to become a hard science field, so they went from a sort of "philosophical" approach to a more mathematical approach. The result is graphs and models and junk that has no chance of taking all factors into consideration and therefore not really relevant to the real world.

no upstart costs
market transparency
rational consumers

Sure a perfect competition works, as long as you have perfect conditions

Inmate
Inmate

@SomethingNew
Yeah, some of the hypotheses are really retarded.

idontknow
idontknow

@Booteefool
I dont know what calc 2 is, we dont have that system in the UK.

Tbh the level of maths I studied at undergrad was really disappointing, so I cant say exactly what is needed for decent standard econ. At the time it seemed nice to just have to cover the simple topics, and they hardly advanced it over the three years, but in reality youre losing out on necessary skills for the job market.

However, I did do finance masters at a top uni. For finance, you need to be strong on PDEs and Ito Calculus which cover a lot of the pricing and stochastic models. Probability theory and statistics is also essential. A lot of the concepts in finance are taken from and applied in a similar way to what you would see in a physics degree. A lot of professors in that area have a physics background. Its easier to get a really good understanding of the area and then apply it to finance or economics than it is to study those topics from the beginning.

AwesomeTucker
AwesomeTucker

@happy_sad
Not from what I've seen. Granted, I haven't looked through 'every' textbook. It's less that they believe prices are static (even though it's implied by the supposed end result) but that the movement of prices are movements toward equilibrium. However, they don't make mention of why this supposed equilibrium never seems to be reached.

@SomethingNew
so they went from a sort of "philosophical" approach to a more mathematical approach.
Exactly. I'd like to see a return to conceptual and logical debates of economics. The only thing modeling does is give economists a false sense of confidence in their theories. The fact of the matter is, even if your theory is trash, I can guarantee you could still contrive a model which supports your theory.

PackManBrainlure
PackManBrainlure

@Burnblaze
Markets are never in equilibrium hence excess supply and demand

StonedTime
StonedTime

@AwesomeTucker
hurr durr models dont work and dont describe reality.

Do you carry a 1 to 1 map around for Navigation?

Ignoramus
Ignoramus

@StonedTime
Sounds like someone doesn't know how models work. Get back to me when you take a statistics course, okay champ?

askme
askme

@Spazyfool

Econ here, work in finance.

mfw when all the business majors come asking me for market advice.
Half of them don't know how the markets are effected by global events.
These people are managing your money .

Basically a state uni econ degree > top 10 business degree in terms of what you actually learn.

Yea they probably have more prospective job offers but most are pretty dull and only got to where they are because families are rich / have connections.

Inmate
Inmate

@Spazyfool
Is a Bachelors in Economics a meme degree
Expanding on what

@BunnyJinx
this guy said.

I go to a mid tier uni and my friend is doing economics and I'm doing engineering + finance. The math I did first year for engineering is similar if not the same as a friend that studied economics first year. We are now second year in and my mid tier economics friend hasnt touched calculus.

It's really just not the same, mid tier unis recognise they don't have top students so they have to dumb it down a bit so they can get more money. I think that goes for most courses.

Courses in general are like that, I've found that for stuff like engineering it gets a fair bit more theoretical the "better" the uni. I get lots of practical questions for math, whereas my top tier uni math friends get a small amount of out there math questions

w8t4u
w8t4u

@massdebater
I tried reading Soros' book The Alchemy of Finance and I thought this is guy is writing on a whole higher level. I'm usually pretty smart and have a high reading level but this was beyond me. What am I missing? What prerequisites do I really need to grok this?

TechHater
TechHater

@Burnblaze
Definitely a meme. It oversimplifies what is always a very complex situation, it rarely reflects real life, despite the best efforts of economemes it does not properly factor in psychology (both individual and aggregate), consumer behavior, government and private intervention and hundreds of other factors.

SD curves will be used in almost every economics class to explain some past event, which is terrific i'm sure, but it cannot predict future events and can't even estimate them, so realistically it exists solely for economists to pretend that their field of psuedo science is valid, when much of the microeconomic side of things has almost no value in real life.

models of this sort should generally be avoided.

RavySnake
RavySnake

@w8t4u
take economics 101 and have experience with the stock market

some of it goes over my head, he doesn't use the same vocabulary i'm familiar with from my 101 class

Spazyfool
Spazyfool

@RavySnake
So just reading some Economics 101 textbooks and then I should be able to take on Alchemy of Finance?

Booteefool
Booteefool

@Spazyfool
i mean, Alchemy of Finance is not THAT abstract
all you need to know is that there are more factors that go into the supply and demand curve than meets the eye; it can be observed in stock expectations. Essentially, there's more chaos to the world, and more misdirect than a simple curve can suggest. Really, things tend to follow the equilibrium IN GENERAL, but things aren't that black and white.

Evil_kitten
Evil_kitten

fucking casuals ITT

read some of Taleb's technical papers ffs

most economists are snake oil salesmen

haveahappyday
haveahappyday

@Evil_kitten
/thread

most economists are snake oil salesmen
and the success stories are full of survivorship bias.

Poker_Star
Poker_Star

@Burnblaze
Economists are no better than historians, they are never able to predict anything, but they sure do know how to "explain" (aka they just make it sound complicated AF so you just give up and agree with them) why something happened once it happens.

kizzmybutt
kizzmybutt

@askme
Basically a state uni econ degree > top 10 business degree in terms of what you actually learn.

this might sound like a meme, but I went to a top 10 business school, and its actually true, especially in term of math, economics, statistics and modelling. Most of our courses were based on "managerial skill". Its fantastic for making connections and opening doors, but I had to spend another year studying to get into an industry that I actually wanted to go into (data science/analytics)

Deadlyinx
Deadlyinx

@Spazyfool
econ is good because it can teach you statistical modelling and data analysis, which is actually useful. It also teaches you meme economic theories and things dreamt up by intellectuals that dont have basis in reality, but look good in models

Emberburn
Emberburn

@kizzmybutt
What's the deal with managerial skills? Most of them seen like "how not to be an autist while working".

When I got into bussines school I thought I would get insights on other stuff. I've 2 years to finish so changing careers is not viable, plus finance and accounting courses (which seems more useful) are present during the last periods. I might specialize in finance or economics, that stuff seems more interesting than organizational behaviour and bussines management.

takes2long
takes2long

@Burnblaze
All Neoclassical models are bunk. Particularly s/d curves.

JunkTop
JunkTop

@Emberburn
Econ major here. The business classes I have to take are basically How to suck your bosses cock 101, no real critical thinking or learning involved at all

New_Cliche
New_Cliche

@Burnblaze
a complete worthless made up bullshit. nobody has ever used any of that shit in work life.

@Spazyfool
Is a Bachelors in Economics a meme degree?

Absolutely. Same goes with masters. Has nothing to do with real life and 99,9% of things you'll learn you will never use or would even know how to implement. just made up bullshit.

and btw "bachelors in economics" means 95% of your classes are something else than economics. some basic math or whatever marketing bullshit

Fuzzy_Logic
Fuzzy_Logic

@Burnblaze
anything Adam Smith is a meme

iluvmen
iluvmen

@Burnblaze
As someone who studies economics, yes, they are.

Evilember
Evilember

@New_Cliche
Absolutely. Same goes with masters. Has nothing to do with real life and 99,9% of things you'll learn you will never use or would even know how to implement. just made up bullshit.
Weird. I got my B.Sc. in Econ and I use economics every day in my job as a real estate appraiser.

I took a significant number of economics classes too. My last two years were full of econ classes.

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