The Reserve Bank is concerned that too many Australians have little idea what the central bank is trying to achieve with interest rates, which it says could be making its job harder.
Even scientific formulae are simplifications.
The difference between using Ohms Law or Boyles Law in engineering vs the plethora of formulae used by economists is that engineers are aware of the simplifications. The materials that engineers use have inherent resistance, capacitance, flex and impurities that affect the outcome, so they reduce or account for them in their calculations.
Economics is not an exact science; the laws are not immutable, and some of the assumed constants are not constant at all.
Also, except for Quantum mechanics and Heisenbergs Uncertainty Principle, engineers are changing the output by observing.
As soon an economist publishes their predictions, people react to their predictions and change the outcome. It isn’t a closed system.
Even scientific formulae are simplifications. The difference between using Ohms Law or Boyles Law in engineering vs the plethora of formulae used by economists is that engineers are aware of the simplifications. The materials that engineers use have inherent resistance, capacitance, flex and impurities that affect the outcome, so they reduce or account for them in their calculations.
Economics is not an exact science; the laws are not immutable, and some of the assumed constants are not constant at all.
Also, except for Quantum mechanics and Heisenbergs Uncertainty Principle, engineers are changing the output by observing.
As soon an economist publishes their predictions, people react to their predictions and change the outcome. It isn’t a closed system.
Well, I’m super rational, and your post sounded kinda rational, so let’s make the basis of our theory that everyone is a rational actor!
Don’t get me started on ‘expectations’ !
I would argue that it isn’t a science at all. It’s more of a religion than anything.
Otherwise, good post.