Rethinking economics is starting now, in Britain

zagubov

Linton wrote: »

I would have thought many businesses could benefit from employing an economist or two. Hopefully they would be better at strategic thinking than the accountants.

As to the usefulness of degrees, I note from another thread that you, like me as it happens, did a Chem Eng degree at great public expense in the '60s which we never used. Were those degrees in practice any more worthy than one in PPE, history (OK I will give you religion) or even African Studies? Actually I would suggest rather less worthy being so narrowly focused.

That's the problem with highly technical degrees. Fine as long as you go into that industry. Otherwise you would probably be better off doing something more widely but less deeply applicable.

I read an article in the 70s/80s which described the chemical engineering job market.

It claimed that in Lancashire, there were 11 HE institutes (Liverpool uni and poly, Manchester Uni, UMIST and Poly, Salford Uni, Preston poly and who knows what else) each of which could meet the country's needs for graduates. I'm sure it was country's not county's before you ask.

Quite an alarming thing to read, as I'd been ;ed to beive that engineering as an area of labour shortage and employment stability.

Loughton_Monkey wrote: »

It was my deliberate decision to take an applied sciences degree and I had the full intention of working in that industry. However, you can re-visit the health of the Chemical Industry in 1972 and find that it was dire. Virtually no recruitment. Absolutely nobody in my year got a Chemical Engineering job and we were all forced to look elsewhere.

As you know, engineering degrees give a good grounding in Mathematics and a good deal about Industrial Economics, presentation of information, project management, and we all got our hands dirty in the labs....


My cynicism towards some of the 'wacky' artistic degrees is tainted, I suppose, by my observations that whereas my own 'lecture load' would have been around 30 hours a week, that of colleagues in things such as PPE or Sociology would struggle to exceed about 10!

I remember in my uni that at the end of my 2nd year I was spending the heatwave months memorising Krebs Cycle while my friends doing Arts and Social Science Degrees were outside throwing frisbees as they had no exams unitl the thrid year. OK I was jealous of the easy time but not that impressed by the worth of the degree you get out of that easy a workload.;)

Linton

Walcott wrote: »

What?

Economists warned financial engineering had become too complex and you think that isn't useful? What problem do you want them to show? Stating that it has become complex beyond the understanding of it's users is the problem!

I honestly think you do not understand economics or misunderstand what is going on in economics if you think an economist did not know what was going on in global financial institutions over the last 20 years!

An undated, unquantified prediction of a disaster that doesnt actually take place for 20 years is useless. I predict that there will be a major earthquake somewhere with large scale loss of life because of inadequate precautions. When it happens I will be able to say "I told you so, why didnt you do anything about it". Arent I clever.

And then you have to take into account that lots of people are predicting disasters which never happen. Perhaps you can tell us what was top of economists concerns 20 years ago - I suspect it wasnt a global collapse of the interbank lending system.

System

Linton wrote: »

An undated, unquantified prediction of a disaster that doesnt actually take place for 20 years is useless. I predict that there will be a major earthquake somewhere with large scale loss of life because of inadequate precautions. When it happens I will be able to say "I told you so, why didnt you do anything about it". Arent I clever.

And then you have to take into account that lots of people are predicting disasters which never happen. Perhaps you can tell us what was top of economists concerns 20 years ago - I suspect it wasnt a global collapse of the interbank lending system.

Wow talk about completely missing the point!

Have you actually looked into Economics before typing out the above? I guess you haven't because otherwise you would know that international economics is, and has been, a major strand of economics for a long time.

Instead of asking me to prove this (which is very easy actually) why don't you actually try to prove otherwise?

As for what their concerns were 20 years ago - the globalisation of financial markets has been a concern for a very long time. Like I said, did you actually look into this before trying to become an expert on the evils of economics? Go to the library of any research university and you will be able to find journals that are 20 years old and cover this topic.

But beyond all this, you seem to think the job of an economist is a regulator who should stop disasters. So tell me, which economists did you vote to public office in the last election?

kabayiri

Thrugelmir wrote: »

Chairman of RBS at the time of its collapse was a chemist. No need to know anything about banking.

Not unusual.

I believe a former head of Co Op bank was also a chemist !

(more pharmaceuticals really )

photogeek

vivatifosi wrote: »

Interesting article from The Economist:

Economics as a discipline is in a crisis following the GFC and so few economists forecasting it.

Great news I think.

There were actually very many economists forecasting that the housing bubble would burst and that the US' trade deficit wasn't sustainable and that the Yanks would shed their debt on the countries exporting to them. Since 2008 Germany's balance of payments surplus, which was reinvested in the US (to support the Dollar against the Euro) and subsequently lost has been subsidizing the average American household by over $20,000. That means that the average German houshold has lost $100,000 to the US crisis. Compared to the US, even Greece, Spain and Italy come cheap.

Loughton_Monkey

photogeek wrote: »

There were actually very many economists forecasting that .....

Just as an infinite load of monkeys on an infinite number of typewriters will eventually come up with the complete works of shakespeare doesn't turn any single monkey into "Nostradamus"...

I predict inflation will be between 0% and 2% next year.
I predict inflation will be above 2% next year.
I predict deflation next year.

There!

I know I will turn out to be right, and can prove it [or would be able to if I could be bothered to create three seperate posts.]

StevieJ

IronWolf wrote: »

You dont need to redefine economics, what you need is people with common sense studying economics.

Plenty of people saw the GFC coming, Warren Buffett had been warning about the unregulated derivatives market since 2002 at least. You need more people to step back from mathematical models and try some scenario evaluation for black swan events.

Ironically that includes the Bank of England (if not anticipating the severity) :eek: Here is a Telegraph article from 2006.

The City could face a financial meltdown if the debt bubble bursts, with over a year's worth of bank profits - £40bn - potentially being wiped off balance sheets, the Bank of England warns today.

The Bank is issuing a stark warning about the potential damage a credit crunch and a collapse in asset prices could cause to the economy and financial system

http://www.telegraph.co.uk/finance/2943149/City-faces-meltdown-if-debt-crisis-hits.html

grizzly1911

kabayiri wrote: »

Not unusual.

I believe a former head of Co Op bank was also a chemist !

(more pharmaceuticals really )

Really what particular line..........

Linton

StevieJ wrote: »

Ironically that includes the Bank of England (if not anticipating the severity) :eek: Here is a Telegraph article from 2006.

http://www.telegraph.co.uk/finance/2943149/City-faces-meltdown-if-debt-crisis-hits.html

If you read the article what was feared was a sudden increase in interest rates arising perhaps from a sharp rise in the oil price causing a fall in economic output.

Doesnt sound like the credit crunch I remember.

It goes on to say

"Although it (the BOE) said the financial system remained extremely healthy, there were six major risks that could, in certain circumstances, lead to serious financial trouble. To a large extent, these risks revolve around the record level of debt that has been built up in recent years by UK households and businesses."

RBS etal didnt crash because of UK household and business debt, it was far more to do with their business models depending on the global money markets.

So perhaps this isnt such a good example of the remarkable forecasting skills of economists. Its more as if someone forecast an earthquake and there was a hurricane. Yes they forecast a disaster, but not the one that actually happened.

antrobus

Linton wrote: »

.....RBS etal didnt crash because of UK household and business debt, it was far more to do with their business models depending on the global money markets......

Read the article again;

The vulnerability of banks to a collapse in the debt bubble is illustrated by the recent rapid rise in their funding gap (see chart), which shows that in recent years the amount lent to customers that is not backed by customer deposits has soared. Banks are, therefore, having to rely much more on the wholesale money market, which tends to be far more expensive than customer deposits.