class5tax

class5tax

1p

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586 weeks ago @ Wall Street Pit - Kartik Athreya for Fed... · 0 replies · +2 points

I think Athreya's thesis (indeed, the thesis of the Fed in general) can be boiled down to a single sentence: "If all you damn actors would just act like the model says you will everything will be fine!"

When we're ruled by models that require only "internal coherence" without any resemblance to the real world that us "actors" live in, system failure should come as no surprise. It's like using beautiful, rigorous models of aerodynamics when the problem at hand is designing buildings. The aerodynamics model may be mathematically sound, but it doesn't really help much with the problem at hand.