Mathiness

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Mathiness is aterm coinedby Paul Romer , which describes the misuse of mathematical formulas in economic analyzes. Mathiness is therefore present when mathematics is not used to make a statement more precise, but to disguise an ideological concern with a multitude of irrelevant mathematical formulas.

Emergence

The term was first used by Paul Romer at a meeting of the American Economic Association in January 2015. He later published his article Mathiness in the Theory of Economic Growth in the American Economic Review . The word creation is based on the term Truthiness , created by the US comedian Stephen Colbert , which describes a perceived truth that is based on intuition, but not on facts. Romer formulates pointedly that mathematics will soon no longer be used to make statements more precise, but only to enforce a theory:

“Presenting a model is like doing a card trick. Everybody knows that there will be some sleight of hand. There is no intent to deceive because no one takes it seriously. Perhaps our norms will soon be like those in professional magic; it will be impolite, perhaps even an ethical breach, to reveal how someone's trick works. "

“Presenting a model is like a card trick. Everyone knows a sleight of hand will follow. There is no intention of fraud because nobody takes it seriously anyway. We may soon be following the rules of professional magicians; it will be considered impolite, perhaps even unethical, to expose how someone else's trick works. "

- Paul Romer quoted from Justin Fox, What's Wrong With 'Mathiness' in Economics?

An intense debate about scientific standards in economics began under the term Mathiness.

Discussions

Tim Harford sees a parallel to the essay Politics and the English Language (1946), in which George Orwell warns that there is a tendency in politics to create a rhetorical fog instead of using precise terms. Since mathematical formulas are only comprehensible with a certain amount of effort, there would be a considerable potential for abuse. Empirically untenable statements, conceptual imprecision or purely hypothetical assumptions could be given a scientific tinge by a jumble of mathematical formulas.

Justin Fox recalls that Richard Thaler documents in his book Misbehaving how economists ignored real phenomena because they could not be reconciled with the dominant mathematical models. Edward Hadas cites Jean Tirole's outstanding work on monopoly regulation as an example of the dubious value of mathematical models in macroeconomics . Tirole comes to the conclusion that there is no simple uniform solution formula for the regulatory problem. Nevertheless, he formulated innumerable equations, all of which are based on the dubious Homo oeconomicus model and which only worked because they were calibrated on the result of careful qualitative analysis .

Noah Smith agrees with Romer that many of the works by Robert E. Lucas and Edward C. Prescott are particularly good examples of mathiness. A lower degree of mathiness is widespread in macroeconomics.

J. Bradford DeLong argues that Noah Smith is going too far in viewing any use of simplistic assumptions as mathiness. It is only mathiness when simplified assumptions are used to guarantee a certain politically desired result and mathematics only has the function of dazzling. In doing so, he takes up the example of the assumption of perfect competition mentioned by Paul Romer . George Stigler always insisted that economic models are based on the assumption of perfect competition. This assumption is much more unrealistic than the competitive assumption of monopoly competition . Since Stigler rejected state interventionism , it was for him a justifiable "noble lie". In this tradition, Robert E. Lucas and Edward C. Prescott always worked with the assumption of perfect competition in their models. Paul Romer rejects this because, according to his understanding, science should strive for empirically reliable results.

Paul Krugman is of the opinion that the macroeconomic debate on lessons from the financial crisis from 2007 and the global economic crisis from 2007 on is only making slow progress because some economists and sometimes entire departments are dominated by the mathiness described by Paul Romer.

Web links

Individual evidence

  1. ↑ Financial Times , Tim Harford , Down with mathiness! , June 5, 2015
  2. ^ BRUEGEL , Jérémie Cohen-Setton, Mathiness in economics , June 8, 2015
  3. ↑ BloombergView , Noah Smith, How 'Mathiness' Made Me Jaded About Economics , May 22, 2015
  4. ↑ Financial Times , Tim Harford , Down with mathiness! , June 5, 2015
  5. ↑ BloombergView , Justin Fox, What's Wrong With 'Mathiness' in Economics? , May 20, 2015
  6. ↑ Reuters , Edward Hadas, Bring on kitchen economics , June 17, 2015
  7. ↑ BloombergView , Noah Smith, How 'Mathiness' Made Me Jaded About Economics , May 22, 2015
  8. ^ J. Bradford DeLong , Noah Smith, Paul Romer, "Mathiness," and Baking the Politics into the Microfoundations ... May 16, 2015
  9. ^ The New York Times , Paul Krugman , The Case of the Missing Minsky , June 1, 2015