Link to my post: Ad hominem, for lack of a better word, is good
Due to Twitter's algorithm, this is a manual re-direct to my post: Ad hominem , for lack of a better word, is good
Information Transfer Economics
A working paper exploring the idea that information equilibrium is a general principle for understanding economics. [Here] is an overview.
Latest posts
Link to my substack post "On Hayek's 'The Use of Knowledge in Society' (1945)"
Due to Twitter's algorithm, this is a manual re-direct to my substack post On Hayek's The Use of Knowledge in Society (1945)
Link to my substack post: Employment situation: core unemployment rising
Since Twitter has disabled likes, retweets, and replies to posts with substack links this is a manual re-direct via blogspot: https://infoeqm.substack.com/p/employment-situation-core-unemployment
Where to find me these days
This post acts as a collection of links to find me in various places for various content. This econ blog has been moved (along with the archives) over to my substack Information Equilibrium . It's free to sign up (and definitely more likely to get to you than twitter ever was). https://infoeqm.substack.com/ I also have an account on mastodon: @infotranecon@econtwitter.net I started a bluesky:…
Is the credibility revolution credible?
Noah Smith made a stir with his claim that historians make theories without empirical backing — something I think is a bit of a category error. I mean even if historian's "theories" truly are "it happened in the past, so this can happen again", that the study of history gives us a sense of the available state space of human civilization, then that observation is such a small piece of the available…
Outbrief on Dynamic Information Equilibrium as a COVID-19 model
What with the US just sort of giving up on doing anything about COVID-19 and just letting it spread it's become just too depressing to continue to track the models day after day. On the radio yesterday I heard that King county (which includes Seattle area, where I live) isn't going to be focusing on tracking cases anymore — so I imagine the quality of the data is going to drop precipitously in the…
Comparing the DIEM and the FRB/US model
Per a question in my Twitter DMs, I thought I'd do a comparison between the Dynamic Information Equilibrium Model (DIEM) and the FRB/US model of the unemployment rate. I've not done this comparison that I can recall. I've previously looked at point forecast comparisons between the different Fed models (e.g. here for 2014). In another post , I took the DIEM model through the Great Recession…
The recession of 2027
From my " Limits to wage growth " post from roughly three years ago: If we project wage growth and NGDP growth using the models, we find that they cross-over in the 2019-2020 time frame. Actually, the exact cross-over is 2019.8 (October 2019) which not only eerily puts it in October (when a lot of market crashes happen in the US) but also is close to the 2019.7 value estimated for yield curve…
Implicit assumptions in Econ 101 made explicit
One of the benefits of the information equilibrium approach to economics is that it makes several of the implicit assumptions explicit. Over the past couple days, I was part of an exchange with Theodore on twitter that started here where I learned something new about how people who have studied economics think about it — and those implicit assumptions. Per his blog, Theodore says he works in…
Eight years of blogging
I spent the past week on Twitter putting up a list of my favorite posts on the blog as a kind of Irish wake for the form for the blog's 8th anniversary. As is typical on these anniversaries, a bit of statistical analysis or visualization — this time, the years of the selected favorites: Looks like 2016-2017 was my peak by the number in my own opinion. It's not just bias by the quantity of posts,…
Ongoing evolution of time series after the COVID-19 shock
I haven't been blogging much the past two years — due to a) work taking nearly all of my energy, and b) the near daily update of data around COVID-19 being more conducive to Twitter than blogging. However, I thought it was time for a longer-term assessment of the economic time series in the context of Dynamic Information Equilibrium Models (DIEMs). First, let's look at the consumer spending data…
Initial claims and other COVID-19 shocks
Back in June of 2020, I posted an estimate of the future path of initial claims [1] on Twitter (click to enlarge): While the rate of improvement was overestimated, it captured the qualitative behavior quite well: Being able to predict the qualitative behavior of the time series in the future is pretty good confirming evidence for a hypothesis — not the least of which being there's no way you could…
Qualitative economics done right, part N [1]
I seem to have involved myself in a Twitter dispute with economist Roger Farmer about what it means to make macro models — or more broadly "the nature of the scientific enterprise", as Roger the economist kindly tried to explain to me, a physicist. Unfortunately, due to his prolific use of the quote tweet the argument is likely impossible to follow. You can see the various threads via this search…
The four failure modes of Enlightenment values
I don't write about process as much these days — in part because I'm no longer working my previous project that had me effectively commuting across the country every month to the middle of nowhere, and in part because I'm now working a much bigger project that barely leaves me enough time to update even the existing dynamic information equilibrium model forecasts. But recently there seems to be an…
Dynamic information equilibrium and COVID-19
Since I've gotten questions, I thought I'd put together a brief explainer on the Dynamic Information Equilibrium Model (DIEM) and its application to the path of COVID-19. Prolog I wrote a preprint on the DIEM a couple years ago ( posted at SSRN ), and gave a talk about the approach at the UW economics department ( see here ). The primary application was to labor markets, specifically the…
What's in a name?
That which we call a model by any other name would describe as well ... or not Shakespeare, I think. I'm in the process of trying to distract myself from obsessively modeling the COVID-19 outbreak, so I thought I'd write a bit about language in technical fields. David Andolfatto didn't think this twitter thread was very illuminating, but at its heart is something that's a problem in economics in…
Seven years later ...
On the 7th anniversary of this blog, we are finding ourselves in the midst of a deadly pandemic and the biggest macroeconomic shock since possibly the Great Depression. I hope everyone out there is staying healthy, practicing good mitigation, and still has a job. The next seven years on the blog are going to be different — gone will be the days of tracing the path of the macroeconomic equilibrium…
What does this physicist think of economists?**
I have had fringe contact with more macroeconomics than usual as of late, for obvious reasons (e.g. I have been producing macroeconomic models that outperform mainstream models by orders of magnitude), and I do understand this is only one corner of the discipline. I don’t mean this as a complaint dump, because most of physics suffers from similar problems due to being a similarly male-dominated…
JOLTS data — and the twig crack that caused the avalanche?
Back from a long hiatus — things were crazy at the real job trying to get set up to work from home for a month or longer. Happy to report my family and I are doing well, and I hope everyone out there is staying healthy. The drop in the JOLTS job openings rate I noted in the previous post (from February) has continued and it appears we're showing a definite deviation: While you may be thinking…
Market updates for a bad week
Now I don't really look at the information equilibrium models for markets as particularly informative (looking at the error band spreads should tell you all you need to know about that) — this should be taken with a grain of salt. And always remember: I'm a crackpot physicist, not a financial adviser. The stock market and recession shocks With that out the way, here's what the recent drop in the…
Dynamic equilibrium: health care CPI
Since I've been looking at a lot of health care data recently, I thought I'd run the US medical care CPI component through the dynamic information equilibrium model (DIEM). It turns out to have roughly the same structure as CPI overall (click to enlarge): A big difference is that the dynamic equilibrium growth rate is α = 0.035/y, basically a full percentage point above the rate for all items α =…
A future response from Random Critical Analysis?
So I have this to look forward to : I'll be addressing the sole constructive, objective argument you made in that blog post within the next few days. I'll try to be respectful and fair, even though you seem to be unable or unwilling to reciprocate. That's regarding my previous post . There were quite a lot of right wing, conservative, and libertarian Twitter accounts (amazingly, groups that don't…
Leaning over backwards: health care edition
It’s a kind of scientific integrity, a principle of scientific thought that corresponds to a kind of utter honesty—a kind of leaning over backwards. For example, if you’re doing an experiment, you should report everything that you think might make it invalid—not only what you think is right about it: other causes that could possibly explain your results; and things you thought of that you’ve…
How should we approach how people think?
A common objection to the information equilibrium approach I've run into over the years is that economics at the micro level is about incentives or at the macro level how people react to policy changes in the economy. My snarky response to exactly that objection earlier today on Twitter was this : The approach can be thought of as assuming people are too (algorithmically) complex for us to know…
Twitter talk slides: information equilibrium and dynamic information equilibrium
Here are the charts for my Twitter talk from today :