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 Originally Posted by Poopadoop
Granted, economics is a soft science and maybe it isn't fair to hold it up to the same standards as physics or chemistry. That's one of it's problems though, the system is so chaotic as to be nearly indecipherable.
I think this fact has gotten lots of economists into trouble. Well, not trouble, but claiming things that don't make sense according to the literature.
Here's an example from this week with my money and banking professor. In a lecture she introduced the concept of "random walk", which is the financial theory that stock prices cannot be predicted. The theory is orthodoxy in finance/economics, and she agrees with it. However, when I spoke with her on this topic, she claimed that bubbles exist, economists are right to look out for bubbles (gave examples of them doing it), and that central banks can deflate bubbles before they start. There's one problem with this, if stock prices are a random walk, economists and central banks can't predict bubbles.
Most economists believe in bubbles and that they can be predicted. Some don't. As far as I can tell, the answer to this question is in the literature, but a bunch of economists are letting their politics and public opinion get in the way of their better judgment. This is pretty common in the field, and it's confusing as fuck.
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