LoCarb

"If we accept the rapidly growing body of evidence and authority suggesting that many of the core concepts of conventional macroeconomics are bollox, and that economists don’t really know what they’re doing, then the important question becomes ‘What next?’ As conventional macroeconomic theory crumbles in the face of facts, what will replace it?''


The Ongoing Collapse of Economics - Graham Caswell

Kotare

Economics has never really recovered from determining that humans don't make rational decisions. There are too many micro variables and that rolls out into the macro level (a bit like climate 'science')

I have a Masters in Economics and would be the first to admit most economics is 'best guess' and can be heavily flavoured by politics and the fashion of the month/year. You can always find expert economists concurrently prophesying boom or bust (most aren't millionaires either).

An example, the OECD, IMF and UK OBR all rapidly revising their forecasts for the effect of Brexit from instant doom to possible growth.

Pulaski

It seems to me that much management of money and economies over the past 50-60 years was based on the assumption that certain economic theories were true. ..... Therefore, surprise surprise, economies behaved broadly as if the economic theories on which the decisions were based, were true. It was circular reasoning if there ever was!

Then 2008-2009 broke us out of that circle, which had already been weakening for at least a decade, longer if you're talking about Japan. Now what?

LoCarb

But this is the foundation stone of neoclassical economic theory.

The whole theory is based on "rational expectations".

But as an economist you would know this already

Damson

Can any of you bods just tell me when the bloody £ will strengthen please?!!

Kotare

About 2020 - but the $NZ might weaken before that depending whether you believe in the 3/7/15/28.5 year cycle or peak gold production Hang on I saw another theory yesterday ...

Damson

😆 Thanks. Er, I think.

A 1 day cycle would do me. in case anyone of influence is reading this, a weakening of the $NZ for a 24 hour period (notified to this forum 1 week in advance preferably) would be very helpful,thank you.

Kotare

Can't help - everytime I change £, the £ strengthens by 5c the next day! If you have to change money wait fo a month or so as the RBNZ is forecast to drop the interest rate a bit then.

Damson

Tell me about it. We abandoned moving to Oz a few years back when the £/$ hit 1.45!!! Thanks for the tip.


Sorry, back to topic.

LoCarb

You'd have to think that the NZ exchange rate is deliberately allowed to remain high for the benefit of the finance sector (banks).

According to British economist Ann Pettifor, who was interviewed on RNZ Nine to Noon on Wednesday, two thirds of New Zealand's current account receipts are in the form of hot money pouring into the bond market.

Crash predictor Ann Pettifor: 'We're no longer citizens, we're customers' | Nine To Noon, 10:06 am on 21 September 2016 | Radio New Zealand'

We're being taken to the cleaners by our Australian owned banks.

Perhaps it's time we reintroduced some capital controls

Charismatic

To be fair in most sciences accepting that what you'd previously believed was flawed is a great driver of progress and change. If economists didn't see the science itself as broken and incomplete I'd be more alarmed. The scale of our ignorance is likely limitless and always will be.

LoCarb

Problem... economists don't think what they believe is flawed.
Nor do politicians.

I think you need to be alarmed

Kotare

Why, no one in NZ will starve providing they have a 1/4 acre section and a rifle for pigs/deer/rabbits (you do don't you)? No more iPhone7's. Subsistence living, JAFAs on their knees, pensioners who know how to make things and do things on a shoestring to the fore. Great :-) :-)

LoCarb

I think you are stuck in the 1950's

Kotare

Not stuck any where :-) but the 60's was an interesting decade (I was in Vietnam part of it). Come the imminent collapse of civilisation/capitalism as you imply (not going to happen) NZ is probably one of the best countries to be in as large chunks of it are still rurally skilled. Do you have any survival skills/traits out of curiousity :-)