CDZ What are you worth?

[NCC1701]

I am not going to take on all of this, just for now I would like to point out that economics is not a science, it only has the veneer of science. At its heart economics is psychology with money. We could tackle that as a topic all its own, maybe later. You like to be precise, as do I, so I am going to focus down on just one point that illustrates just how bad economics really is as a discipline.

Supply demand equilibrium does not exist, never has existed. That fantasy is used time again and taught as gospel. The fact is markets are NEVER in equilibrium, NEVER. I am a trader and I have never seen any market reach equilibrium in over 20 years. I have followed corn, silver, gold, oil, stocks, bonds, currency cross rates, cattle, and even pork bellies. If you think about it, you are asking millions of people to all simultaneously agree on price, with a vanishing bid-ask spread.

The lesson is that econ is full of fallacy and religion, were it not then all these geniuses like Yellen would never have let 2008 happen in the first place, let alone be surprised it happened.




Green:
I beg to differ. So does Robert Schiller. Nobody thinks economics is a natural science as is physics or chemistry, or even math, which strictly is a language, namely the language used to describe as precisely as we are able the structure and/or behavior of things and humans. That said, attacking, discrediting, or questioning the findings/theories/models (science sense of the word) of rigorous economic inquiry and analysis on the basis of whether the discipline is or isn't a science is ridiculous and logically fallacious. Attacking a given finding (or set thereof) on the basis of it's not withstanding critical analysis, on the other hand is valid and sound.

Now that isn't to say you, I, or others cannot think whatever the hell we want to think about a given economic theory or prediction; we each can do that at will and with abandon. What matters, however, is whether what we each think is the result of rigorous critical analysis, not anecdotal analysis for example, that shows an economic theory, finding, or model to be invalid. Which one legitimately invalidates -- a whole theory, a specific finding that is part of a theory, or a specific model used to apply the theory in a predictive sense -- determines just how far one can "go" in saying there is something amiss. If I use "such and such" an economic model, say, to predict the demand for "tiddlywinks," your rigorous analysis may show that the model I used included or omitted a relevant factor, or that I included an irrelevant factor. Your doing that will legitimately invalidate my results, but it's not going to alter the validity of the theory I attempted to model. In other words, you will have shown that I misapplied/misinterpreted the theory, not that the theory I was modeling is flawed.

Pink:
You're remarks about equilibrium price imply (by your choice of verb tense) that equilibrium price is something that exists as a static sum. It is not. So what is the equilibrium price? In short, it's just the selling price of a good/service at any given point in time.

• It is the sum a buyer pays and a seller accepts in any given exchange.
• It is the sum paid when a buyer and seller agree to an exchange of a defined quantity of resources at an agreed upon price.

For every exchange, a seller provides a quantity of goods and a buyer demands the exact same quantity of goods. Thus the equilibrium price is achieved in every single transaction that happens. The fluidity/constancy of equilibrium prices varies.

• When a store has a shirt offered at $50 and buyers buy it for $50, that is is the equilibrium price. What does it mean when a buyer agrees to buy multiple shirts instead of only one shirt for $50? It means the demand curve for that buyer and the supply curve for the seller each have shifted, the demand curve having shifted "up" and the supply curve having shifted "down/left." (See Graphs 6 and 8 below) That corresponds to demand shifting from curve D2 to D1 and the supply curve shifting from S2 to S1. (Sorry, but I'm not going to build my own graphs that have the correct line identifiers and movement arrows on them.)
  
  
  
  
  
  Graphs 5 and 7 can be used to understand what happens when the quantity supplied/demanded is held constant and the selling price is what changes. When do we observe this happening? When the price of a good/service increases and a consumer (or consumers in general) buy just as much of it.
  
  Do not confuse a shift in supply or demand with a change in the quantity supplied/demanded (see also: What Factor Causes a Change in Quantity Supplied?). (Shifts in one or the other curve vs. movements along a given curve.) The latter is what happens when the quantity a seller is willing to supply changes because the selling price has changed. The first graph below illustrates a change in the quantity supplied, the second illustrates, again in isolation, a change in the quantity demanded.
  
  When do we observe this behavior -- a change in the quantity supplied -- on the part of a seller? To answer that question, consider what circumstance would lead a supplier to offer to sell two units a the same price it was formerly willing to sell just one. Alternatively, consider when a supplier would sell one unit at the price for which it used to sell two. What makes that happen? A shift in demand, not a change in the quantity demanded.
  
  When do we observe buyers buying a higher quantity? Here again, consider when you would buy more of a good due to a change in the price. What makes that happen? A shift is supply, not a change in the quantity supplied.
  
  
• 
  
  
  
  The same thing is what's going on with movements along the demand curve. The second graph above illustrates a change in the quantity demanded.
  
  What're the key take-aways about the distinctions?
  • That more quantity is supplied/demanded at every price along a curve when there is a shift in supply/demand. One can see this by drawing horizontal lines across the graphs. (Don't get confused. Even though the graph "looks" like price is a function of quantity, it is not. One can Google to find out why economists "flip" the axes.)
    
  • Movements along a given curve are what happens when "the other" curve shifts. It's nifty to discuss them, but they aren't what happens very often, yet they happen more than "very rarely."
• The graphs above and how to interpret them don't change merely because we move from discussing one buyer and seller to discussing a market as a whole. You surely have seen this as a trader. What is/was the equilibrium price of, say, pork bellies last hour, yesterday, this morning, etc.? It is whatever they were selling at at that point in time. Is the equilibrium price constant for pork bellies? For a brief moment in time, yes, but not for any defined span of time.
  
  What does that tell us about the graphs we see? It tells us that they reflect the market at a single point in time and that if we are of a mind to look at the graph (equilibrium price) of a given market, seller or buyer, whichever it be we seek to analyze, we need to aggregate the graphs over a period to arrive at a summary depiction that will have what amounts to an average equilibrium price for that period of time.

I'm surprised you, as a trader of "whatever," have written the "pink" remarks. Each time we hear quoted the price of a stock or commodity, for example, we are being told exactly what the equilibrium price for that item is at that point in time. When the next buyer and seller execute the next exchange of the item, the exchange may occur at the equilibrium price "we all just heard on the radio" or it may occur at a different price. No matter at what price it occurs, that sum will be the then current equilibrium price.

I'm not really sure what motivated your making the "pink" remarks.

• Perhaps what you are trying to communicate is the idea of determining what is the demand curve and supply curve for a given pair of buyer and seller or for the market as a whole?
• Perhaps you're remarking on the fluidity of equilibrium prices and conflating the fact that selling prices change "constantly?"
• Perhaps you are alluding to a common misperception about economics, the mistaken idea that it's charts and graphs, as we see them in texts, predict specific behavior of specific individuals in specific situations at specific points in time rather than explaining how people in general behave in response to scarcity, choice and imperfect information?
• Perhaps you're reflecting on the element of uncertainty given by the fact that that we cannot and do not define or know the supply and demand curves for every buyer and seller in every situation?
• Maybe some combination of the the things above? Maybe some mix of them and/or other things? Maybe something altogether different?

I don't really know. What I do know is that your central notion in the "pink" text is just nuts. Every time there is an exchange, an equilibrium price is achieved.



Note:

Do not confuse the various types of demand. In general economics parlance "demand" is synonymous with "buy," except in explicitly identified instances, one such being when the context is not effective/actual supply and effective/actual demand situations but rather implied demand/supply situations. One example of that sort of situation is when, say, a State Highway Administration solicits economic guidance about what will be the demand for a new road so they know how many lanes to make it, what and where entrances to it and exits from it should be built, and from "where to where" to build it. That is an example of derived demand.

​

A. You: Nobody thinks economics is a natural science as is physics or chemistry, or even math, which strictly is a language, namely the language used to describe as precisely as we are able the structure and/or behavior of things and humans. That said, attacking, discrediting, or questioning the findings/theories/models (science sense of the word) of rigorous economic inquiry and analysis on the basis of whether the discipline is or isn't a science is ridiculous and logically fallacious. Attacking a given finding (or set thereof) on the basis of it's not withstanding critical analysis, on the other hand is valid and sound.

You just constructed a self refuting argument. We agree it isn't a science, but you go on to conclude it is therefore rigorous. That is a contradiction, science is the only known way to rigorously attack a subject, therefore it is not strictly rigorous. Ever wonder why there is never agreement or it lacks predictive power?

B. I stated that equilibrium does not exist, then you go on to restate the standard religion....

For price to be in equilibrium as defined by you, it must trade at constant price over a period of time t over many trades AND depth of market must vanish. Depth of market is the order book for all limit orders currently in place in any given market. There are always many orders above and below the market, it never vanishes, ever.

Supply and demand curves are crap, there is only supply known at a point in time and that is only what producers want you to know about. Demand is unknowable, there is a lot of speculative demand that can change on a whim.

You also miss the fact that people buy and sell things based upon perception of the future, which is also highly volatile and the future is unknowable.

 

[dblack]

What are you talking about? What makes O-care coercive? Is anyone forced to participate in Obamacare? No.

Then why was a law needed?

 

[320 Years of History]

What are you talking about? What makes O-care coercive? Is anyone forced to participate in Obamacare? No.

Then why was a law needed?

To define the consequences one should expect if one opts not to obtain health care insurance. I didn't say there's no opportunity cost associated with one's choice, just that one isn't forced to make any particular choice.

 

[320 Years of History]

I am not going to take on all of this, just for now I would like to point out that economics is not a science, it only has the veneer of science. At its heart economics is psychology with money. We could tackle that as a topic all its own, maybe later. You like to be precise, as do I, so I am going to focus down on just one point that illustrates just how bad economics really is as a discipline.

Supply demand equilibrium does not exist, never has existed. That fantasy is used time again and taught as gospel. The fact is markets are NEVER in equilibrium, NEVER. I am a trader and I have never seen any market reach equilibrium in over 20 years. I have followed corn, silver, gold, oil, stocks, bonds, currency cross rates, cattle, and even pork bellies. If you think about it, you are asking millions of people to all simultaneously agree on price, with a vanishing bid-ask spread.

The lesson is that econ is full of fallacy and religion, were it not then all these geniuses like Yellen would never have let 2008 happen in the first place, let alone be surprised it happened.




Green:
I beg to differ. So does Robert Schiller. Nobody thinks economics is a natural science as is physics or chemistry, or even math, which strictly is a language, namely the language used to describe as precisely as we are able the structure and/or behavior of things and humans. That said, attacking, discrediting, or questioning the findings/theories/models (science sense of the word) of rigorous economic inquiry and analysis on the basis of whether the discipline is or isn't a science is ridiculous and logically fallacious. Attacking a given finding (or set thereof) on the basis of it's not withstanding critical analysis, on the other hand is valid and sound.

Now that isn't to say you, I, or others cannot think whatever the hell we want to think about a given economic theory or prediction; we each can do that at will and with abandon. What matters, however, is whether what we each think is the result of rigorous critical analysis, not anecdotal analysis for example, that shows an economic theory, finding, or model to be invalid. Which one legitimately invalidates -- a whole theory, a specific finding that is part of a theory, or a specific model used to apply the theory in a predictive sense -- determines just how far one can "go" in saying there is something amiss. If I use "such and such" an economic model, say, to predict the demand for "tiddlywinks," your rigorous analysis may show that the model I used included or omitted a relevant factor, or that I included an irrelevant factor. Your doing that will legitimately invalidate my results, but it's not going to alter the validity of the theory I attempted to model. In other words, you will have shown that I misapplied/misinterpreted the theory, not that the theory I was modeling is flawed.

Pink:
You're remarks about equilibrium price imply (by your choice of verb tense) that equilibrium price is something that exists as a static sum. It is not. So what is the equilibrium price? In short, it's just the selling price of a good/service at any given point in time.

• It is the sum a buyer pays and a seller accepts in any given exchange.
• It is the sum paid when a buyer and seller agree to an exchange of a defined quantity of resources at an agreed upon price.

For every exchange, a seller provides a quantity of goods and a buyer demands the exact same quantity of goods. Thus the equilibrium price is achieved in every single transaction that happens. The fluidity/constancy of equilibrium prices varies.

• When a store has a shirt offered at $50 and buyers buy it for $50, that is is the equilibrium price. What does it mean when a buyer agrees to buy multiple shirts instead of only one shirt for $50? It means the demand curve for that buyer and the supply curve for the seller each have shifted, the demand curve having shifted "up" and the supply curve having shifted "down/left." (See Graphs 6 and 8 below) That corresponds to demand shifting from curve D2 to D1 and the supply curve shifting from S2 to S1. (Sorry, but I'm not going to build my own graphs that have the correct line identifiers and movement arrows on them.)
  
  
  
  
  
  Graphs 5 and 7 can be used to understand what happens when the quantity supplied/demanded is held constant and the selling price is what changes. When do we observe this happening? When the price of a good/service increases and a consumer (or consumers in general) buy just as much of it.
  
  Do not confuse a shift in supply or demand with a change in the quantity supplied/demanded (see also: What Factor Causes a Change in Quantity Supplied?). (Shifts in one or the other curve vs. movements along a given curve.) The latter is what happens when the quantity a seller is willing to supply changes because the selling price has changed. The first graph below illustrates a change in the quantity supplied, the second illustrates, again in isolation, a change in the quantity demanded.
  
  When do we observe this behavior -- a change in the quantity supplied -- on the part of a seller? To answer that question, consider what circumstance would lead a supplier to offer to sell two units a the same price it was formerly willing to sell just one. Alternatively, consider when a supplier would sell one unit at the price for which it used to sell two. What makes that happen? A shift in demand, not a change in the quantity demanded.
  
  When do we observe buyers buying a higher quantity? Here again, consider when you would buy more of a good due to a change in the price. What makes that happen? A shift is supply, not a change in the quantity supplied.
  
  
• 
  
  
  
  The same thing is what's going on with movements along the demand curve. The second graph above illustrates a change in the quantity demanded.
  
  What're the key take-aways about the distinctions?
  • That more quantity is supplied/demanded at every price along a curve when there is a shift in supply/demand. One can see this by drawing horizontal lines across the graphs. (Don't get confused. Even though the graph "looks" like price is a function of quantity, it is not. One can Google to find out why economists "flip" the axes.)
    
  • Movements along a given curve are what happens when "the other" curve shifts. It's nifty to discuss them, but they aren't what happens very often, yet they happen more than "very rarely."
• The graphs above and how to interpret them don't change merely because we move from discussing one buyer and seller to discussing a market as a whole. You surely have seen this as a trader. What is/was the equilibrium price of, say, pork bellies last hour, yesterday, this morning, etc.? It is whatever they were selling at at that point in time. Is the equilibrium price constant for pork bellies? For a brief moment in time, yes, but not for any defined span of time.
  
  What does that tell us about the graphs we see? It tells us that they reflect the market at a single point in time and that if we are of a mind to look at the graph (equilibrium price) of a given market, seller or buyer, whichever it be we seek to analyze, we need to aggregate the graphs over a period to arrive at a summary depiction that will have what amounts to an average equilibrium price for that period of time.

I'm surprised you, as a trader of "whatever," have written the "pink" remarks. Each time we hear quoted the price of a stock or commodity, for example, we are being told exactly what the equilibrium price for that item is at that point in time. When the next buyer and seller execute the next exchange of the item, the exchange may occur at the equilibrium price "we all just heard on the radio" or it may occur at a different price. No matter at what price it occurs, that sum will be the then current equilibrium price.

I'm not really sure what motivated your making the "pink" remarks.

• Perhaps what you are trying to communicate is the idea of determining what is the demand curve and supply curve for a given pair of buyer and seller or for the market as a whole?
• Perhaps you're remarking on the fluidity of equilibrium prices and conflating the fact that selling prices change "constantly?"
• Perhaps you are alluding to a common misperception about economics, the mistaken idea that it's charts and graphs, as we see them in texts, predict specific behavior of specific individuals in specific situations at specific points in time rather than explaining how people in general behave in response to scarcity, choice and imperfect information?
• Perhaps you're reflecting on the element of uncertainty given by the fact that that we cannot and do not define or know the supply and demand curves for every buyer and seller in every situation?
• Maybe some combination of the the things above? Maybe some mix of them and/or other things? Maybe something altogether different?

I don't really know. What I do know is that your central notion in the "pink" text is just nuts. Every time there is an exchange, an equilibrium price is achieved.



Note:

Do not confuse the various types of demand. In general economics parlance "demand" is synonymous with "buy," except in explicitly identified instances, one such being when the context is not effective/actual supply and effective/actual demand situations but rather implied demand/supply situations. One example of that sort of situation is when, say, a State Highway Administration solicits economic guidance about what will be the demand for a new road so they know how many lanes to make it, what and where entrances to it and exits from it should be built, and from "where to where" to build it. That is an example of derived demand.

​

A. You: Nobody thinks economics is a natural science as is physics or chemistry, or even math, which strictly is a language, namely the language used to describe as precisely as we are able the structure and/or behavior of things and humans. That said, attacking, discrediting, or questioning the findings/theories/models (science sense of the word) of rigorous economic inquiry and analysis on the basis of whether the discipline is or isn't a science is ridiculous and logically fallacious. Attacking a given finding (or set thereof) on the basis of it's not withstanding critical analysis, on the other hand is valid and sound.

You just constructed a self refuting argument. We agree it isn't a science, but you go on to conclude it is therefore rigorous. That is a contradiction, science is the only known way to rigorously attack a subject, therefore it is not strictly rigorous. Ever wonder why there is never agreement or it lacks predictive power?

B. I stated that equilibrium does not exist, then you go on to restate the standard religion....

For price to be in equilibrium as defined by you, it must trade at constant price over a period of time t over many trades AND depth of market must vanish. Depth of market is the order book for all limit orders currently in place in any given market. There are always many orders above and below the market, it never vanishes, ever.

Supply and demand curves are crap, there is only supply known at a point in time and that is only what producers want you to know about. Demand is unknowable, there is a lot of speculative demand that can change on a whim.

You also miss the fact that people buy and sell things based upon perception of the future, which is also highly volatile and the future is unknowable.

Did you read the content at the very first link in the post?

 

[Boss]

Blue:
We agree that pure laissez faire doesn't exist. We seem not to have agreed on the cause. As far as I can tell, it does not exist because of the execution of authority granted by the Constitution, that authority having been and being used to mitigate the downsides of laissez faire.

There is no "downside" to the free market system until you can present a downside we both agree is a downside and not someone's opinion. So far, even with laisse faire, you have not done that. Laissez faire capitalism doesn't exist because we have a constitution which enumerates certain power to government which mitigates any potential shortcoming of free markets and in doing this, prevents laissez faire. There is no downside, there are only particular things that free market capitalism isn't suitable to deal with because incentives are all wrong. These things are dealt with in Article I Section 8 of the Constitution.

IIRC, your primary objection is that you think the barriers the government has implemented to boost the equity in our limited freedom system (as opposed to the 100% freedom of unbridled capitalism) is that the government defines the prices at which goods/services can be exchanged. (quantity sold/demanded is a function of price) Aside from the case of "natural monopoly" goods/services, and the labor price floor, I'm not aware of anything for which that is true. Are you?

That isn't the point. Government mandates, regulations, subsidies, tariffs, price caps, penalties, fines and taxation all have a negative effect on free markets. As Milton Friedman points out in the video, we don't know it and we're never aware of it because we never realize it. Let's take an automobile for example... how much less would one cost if not for thousands of government mandated regulations required? Yes, I realize that most of them are legitimately imposed for safety and environmental protection, but you should be able to comprehend that without all the assorted regulations, a supplier of cars could offer one much cheaper to a consumer.

 

[320 Years of History]

There is no "downside" to the free market system until you can present a downside we both agree is a downside and not someone's opinion.

I can assure you that we don't need to agree upon the existence of one or more downsides for them to exist.

 

[NCC1701]

What are you talking about? What makes O-care coercive? Is anyone forced to participate in Obamacare? No.

Then why was a law needed?

To define the consequences one should expect if one opts not to obtain health care insurance. I didn't say there's no opportunity cost associated with one's choice, just that one isn't forced to make any particular choice.

forced to pay a fine if you choose to not participate is called coercion, it is not 'defining consequences'

what a load of shit

 

[NCC1701]

I am not going to take on all of this, just for now I would like to point out that economics is not a science, it only has the veneer of science. At its heart economics is psychology with money. We could tackle that as a topic all its own, maybe later. You like to be precise, as do I, so I am going to focus down on just one point that illustrates just how bad economics really is as a discipline.

Supply demand equilibrium does not exist, never has existed. That fantasy is used time again and taught as gospel. The fact is markets are NEVER in equilibrium, NEVER. I am a trader and I have never seen any market reach equilibrium in over 20 years. I have followed corn, silver, gold, oil, stocks, bonds, currency cross rates, cattle, and even pork bellies. If you think about it, you are asking millions of people to all simultaneously agree on price, with a vanishing bid-ask spread.

The lesson is that econ is full of fallacy and religion, were it not then all these geniuses like Yellen would never have let 2008 happen in the first place, let alone be surprised it happened.




Green:
I beg to differ. So does Robert Schiller. Nobody thinks economics is a natural science as is physics or chemistry, or even math, which strictly is a language, namely the language used to describe as precisely as we are able the structure and/or behavior of things and humans. That said, attacking, discrediting, or questioning the findings/theories/models (science sense of the word) of rigorous economic inquiry and analysis on the basis of whether the discipline is or isn't a science is ridiculous and logically fallacious. Attacking a given finding (or set thereof) on the basis of it's not withstanding critical analysis, on the other hand is valid and sound.

Now that isn't to say you, I, or others cannot think whatever the hell we want to think about a given economic theory or prediction; we each can do that at will and with abandon. What matters, however, is whether what we each think is the result of rigorous critical analysis, not anecdotal analysis for example, that shows an economic theory, finding, or model to be invalid. Which one legitimately invalidates -- a whole theory, a specific finding that is part of a theory, or a specific model used to apply the theory in a predictive sense -- determines just how far one can "go" in saying there is something amiss. If I use "such and such" an economic model, say, to predict the demand for "tiddlywinks," your rigorous analysis may show that the model I used included or omitted a relevant factor, or that I included an irrelevant factor. Your doing that will legitimately invalidate my results, but it's not going to alter the validity of the theory I attempted to model. In other words, you will have shown that I misapplied/misinterpreted the theory, not that the theory I was modeling is flawed.

Pink:
You're remarks about equilibrium price imply (by your choice of verb tense) that equilibrium price is something that exists as a static sum. It is not. So what is the equilibrium price? In short, it's just the selling price of a good/service at any given point in time.

• It is the sum a buyer pays and a seller accepts in any given exchange.
• It is the sum paid when a buyer and seller agree to an exchange of a defined quantity of resources at an agreed upon price.

For every exchange, a seller provides a quantity of goods and a buyer demands the exact same quantity of goods. Thus the equilibrium price is achieved in every single transaction that happens. The fluidity/constancy of equilibrium prices varies.

• When a store has a shirt offered at $50 and buyers buy it for $50, that is is the equilibrium price. What does it mean when a buyer agrees to buy multiple shirts instead of only one shirt for $50? It means the demand curve for that buyer and the supply curve for the seller each have shifted, the demand curve having shifted "up" and the supply curve having shifted "down/left." (See Graphs 6 and 8 below) That corresponds to demand shifting from curve D2 to D1 and the supply curve shifting from S2 to S1. (Sorry, but I'm not going to build my own graphs that have the correct line identifiers and movement arrows on them.)
  
  
  
  
  
  Graphs 5 and 7 can be used to understand what happens when the quantity supplied/demanded is held constant and the selling price is what changes. When do we observe this happening? When the price of a good/service increases and a consumer (or consumers in general) buy just as much of it.
  
  Do not confuse a shift in supply or demand with a change in the quantity supplied/demanded (see also: What Factor Causes a Change in Quantity Supplied?). (Shifts in one or the other curve vs. movements along a given curve.) The latter is what happens when the quantity a seller is willing to supply changes because the selling price has changed. The first graph below illustrates a change in the quantity supplied, the second illustrates, again in isolation, a change in the quantity demanded.
  
  When do we observe this behavior -- a change in the quantity supplied -- on the part of a seller? To answer that question, consider what circumstance would lead a supplier to offer to sell two units a the same price it was formerly willing to sell just one. Alternatively, consider when a supplier would sell one unit at the price for which it used to sell two. What makes that happen? A shift in demand, not a change in the quantity demanded.
  
  When do we observe buyers buying a higher quantity? Here again, consider when you would buy more of a good due to a change in the price. What makes that happen? A shift is supply, not a change in the quantity supplied.
  
  
• 
  
  
  
  The same thing is what's going on with movements along the demand curve. The second graph above illustrates a change in the quantity demanded.
  
  What're the key take-aways about the distinctions?
  • That more quantity is supplied/demanded at every price along a curve when there is a shift in supply/demand. One can see this by drawing horizontal lines across the graphs. (Don't get confused. Even though the graph "looks" like price is a function of quantity, it is not. One can Google to find out why economists "flip" the axes.)
    
  • Movements along a given curve are what happens when "the other" curve shifts. It's nifty to discuss them, but they aren't what happens very often, yet they happen more than "very rarely."
• The graphs above and how to interpret them don't change merely because we move from discussing one buyer and seller to discussing a market as a whole. You surely have seen this as a trader. What is/was the equilibrium price of, say, pork bellies last hour, yesterday, this morning, etc.? It is whatever they were selling at at that point in time. Is the equilibrium price constant for pork bellies? For a brief moment in time, yes, but not for any defined span of time.
  
  What does that tell us about the graphs we see? It tells us that they reflect the market at a single point in time and that if we are of a mind to look at the graph (equilibrium price) of a given market, seller or buyer, whichever it be we seek to analyze, we need to aggregate the graphs over a period to arrive at a summary depiction that will have what amounts to an average equilibrium price for that period of time.

I'm surprised you, as a trader of "whatever," have written the "pink" remarks. Each time we hear quoted the price of a stock or commodity, for example, we are being told exactly what the equilibrium price for that item is at that point in time. When the next buyer and seller execute the next exchange of the item, the exchange may occur at the equilibrium price "we all just heard on the radio" or it may occur at a different price. No matter at what price it occurs, that sum will be the then current equilibrium price.

I'm not really sure what motivated your making the "pink" remarks.

• Perhaps what you are trying to communicate is the idea of determining what is the demand curve and supply curve for a given pair of buyer and seller or for the market as a whole?
• Perhaps you're remarking on the fluidity of equilibrium prices and conflating the fact that selling prices change "constantly?"
• Perhaps you are alluding to a common misperception about economics, the mistaken idea that it's charts and graphs, as we see them in texts, predict specific behavior of specific individuals in specific situations at specific points in time rather than explaining how people in general behave in response to scarcity, choice and imperfect information?
• Perhaps you're reflecting on the element of uncertainty given by the fact that that we cannot and do not define or know the supply and demand curves for every buyer and seller in every situation?
• Maybe some combination of the the things above? Maybe some mix of them and/or other things? Maybe something altogether different?

I don't really know. What I do know is that your central notion in the "pink" text is just nuts. Every time there is an exchange, an equilibrium price is achieved.



Note:

Do not confuse the various types of demand. In general economics parlance "demand" is synonymous with "buy," except in explicitly identified instances, one such being when the context is not effective/actual supply and effective/actual demand situations but rather implied demand/supply situations. One example of that sort of situation is when, say, a State Highway Administration solicits economic guidance about what will be the demand for a new road so they know how many lanes to make it, what and where entrances to it and exits from it should be built, and from "where to where" to build it. That is an example of derived demand.

​

A. You: Nobody thinks economics is a natural science as is physics or chemistry, or even math, which strictly is a language, namely the language used to describe as precisely as we are able the structure and/or behavior of things and humans. That said, attacking, discrediting, or questioning the findings/theories/models (science sense of the word) of rigorous economic inquiry and analysis on the basis of whether the discipline is or isn't a science is ridiculous and logically fallacious. Attacking a given finding (or set thereof) on the basis of it's not withstanding critical analysis, on the other hand is valid and sound.

You just constructed a self refuting argument. We agree it isn't a science, but you go on to conclude it is therefore rigorous. That is a contradiction, science is the only known way to rigorously attack a subject, therefore it is not strictly rigorous. Ever wonder why there is never agreement or it lacks predictive power?

B. I stated that equilibrium does not exist, then you go on to restate the standard religion....

For price to be in equilibrium as defined by you, it must trade at constant price over a period of time t over many trades AND depth of market must vanish. Depth of market is the order book for all limit orders currently in place in any given market. There are always many orders above and below the market, it never vanishes, ever.

Supply and demand curves are crap, there is only supply known at a point in time and that is only what producers want you to know about. Demand is unknowable, there is a lot of speculative demand that can change on a whim.

You also miss the fact that people buy and sell things based upon perception of the future, which is also highly volatile and the future is unknowable.

Did you read the content at the very first link in the post?

yup, and it says nothing, nor does it challenge anything I say

You think as long as some appears rigorous that is all that is necessary. That is incorrect, any scientific theory must have predictive power and be testable by all.

 

[320 Years of History]

So far, even with laisse faire, you have not done that.

Insofar as you think that's so, I can tell you've not read all the linked content in my posts.

 

[320 Years of History]

any scientific theory must have predictive power and be testable by all.

...But "all" don't have the skills, tools and knowledge to actually perform the tests.

 

[320 Years of History]

yup, and it says nothing, nor does it challenge anything I say

You could not have read it and actually write that, not if "reading" also means comprehending.

 

[NCC1701]

any scientific theory must have predictive power and be testable by all.

...But "all" don't have the skills, tools and knowledge to actually perform the tests.

it doesn't matter that stupid people exist, all that matters is that it is possible to test theories against reality, that is a tenant of science. Mostly theories in science are tested by other scientists, but anyone with the motivation can do it.

If an economics, there does not exist any well tested overarching rigorous theory, there is only a set of tendencies and all sorts of pet theories that people put forward. Well accepted in science means that the theory has been tested in repeatable experimental setups, it seems that 'well tested' in econ means accepted by a majority of economists. That is called a fallacy as the validity of a claim in science is not determined by the number of adherents to a claim.

 

[NCC1701]

yup, and it says nothing, nor does it challenge anything I say

You could not have read it and actually write that, not if "reading" also means comprehending.

demonstrate where I am wrong in any of my claims

 

[320 Years of History]

it doesn't matter that stupid people exist, all that matters is that it is possible to test theories against reality, that is a tenant of science. Mostly theories in science are tested by other scientists, but anyone with the motivation can do it.

Will is important, but no less so than is wherewithal.

If an economics, there does not exist any well tested overarching rigorous theory, there is only a set of tendencies and all sorts of pet theories that people put forward. Well accepted in science means that the theory has been tested in repeatable experimental setups, it seems that 'well tested' in econ means accepted by a majority of economists. That is called a fallacy as the validity of a claim in science is not determined by the number of adherents to a claim.

As is the case with epidemiologists, the fundamental challenge faced by economists -- and a root cause of many disagreements in the field -- is the limited ability to run experiments. If one could randomize policy decisions and then observe what happens to the economy and people’s lives, one would be able to get a precise understanding of how the economy works and how to improve policy. But the practical and ethical costs of such experiments preclude this sort of approach. (Surely we don’t want to create more financial crises just to understand how they work.)

Nonetheless, economists overcome these challenges by developing and using modeling tools to obtain compelling answers to specific policy questions. In previous decades the most prominent economists were typically theorists like Paul Krugman and Janet L. Yellen, whose models continue to guide economic thinking. Today, the most prominent economists are often empiricists like David Card of the University of California, Berkeley, and Esther Duflo of the Massachusetts Institute of Technology, who focus on testing old theories and formulating new ones that fit the evidence.

This kind of empirical work in economics might be compared to the “micro” advances in medicine (like research on therapies for heart disease) that have contributed enormously to increasing longevity and quality of life, even as the “macro” questions of the determinants of health remain contested.

Consider the politically charged question of whether extending unemployment benefits increases unemployment rates by reducing workers’ incentives to return to work. Nearly a dozen economic studies have analyzed this question by comparing unemployment rates in states that have extended unemployment benefits with those in states that do not. These studies approximate medical experiments in which some groups receive a treatment -- in this case, extended unemployment benefits -- while “control” groups don’t.

These studies have uniformly found that a 10-week extension in unemployment benefits raises the average amount of time people spend out of work by at most one week. This simple, unassailable finding implies that policy makers can extend unemployment benefits to provide assistance to those out of work without substantially increasing unemployment rates.

Other economic studies have taken advantage of the constraints inherent in a particular policy to obtain scientific evidence. An excellent recent example concerned health insurance in Oregon. In 2008, the state of Oregon decided to expand its state health insurance program to cover additional low-income individuals, but it had funding to cover only a small fraction of the eligible families. In collaboration with economics researchers, the state designed a lottery procedure by which individuals who received the insurance could be compared with those who did not, creating in effect a first-rate randomized experiment.

The study found that getting insurance coverage increased the use of health care, reduced financial strain and improved well-being -- results that now provide invaluable guidance in understanding what we should expect from the Affordable Care Act.

Even when such experiments are unfeasible, there are ways to use “big data” to help answer policy questions. In a study Dr. Chetty, Friedman and Rockoff conducted, for example, they analyzed the impacts of high-quality elementary school teachers on their students’ outcomes as adults. One might think that it would be nearly impossible to isolate the causal effect of a third-grade teacher while accounting for all the other factors that affect a child’s life outcomes. Yet they were able to develop methods to identify the causal effect of teachers by comparing students in consecutive cohorts within a school. Suppose, for example, that an excellent teacher taught third grade in a given school in 1995 but then went on maternity leave in 1996. Since the teacher’s maternity leave is essentially a random event, by comparing the outcomes of students who happened to reach third grade in 1995 versus 1996, one can isolate the causal effect of teacher quality on students’ outcomes.

Using a data set with anonymous records on 2.5 million students, they found that high-quality teachers significantly improved their students’ performance on standardized tests and, more important, increased their earnings and college attendance rates, and reduced their risk of teenage pregnancy. These findings -- which have since been replicated in other school districts -- provide policymakers with guidance on how to measure and improve teacher quality.

These examples are not anomalous. And as the availability of data increases, economics will continue to become a more empirical, scientific field. In the meantime, it is simplistic and irresponsible to use disagreements among economists on a handful of difficult questions as an excuse to ignore the field’s many topics of consensus and its ability to inform policy decisions on the basis of evidence instead of ideology.

 

[NCC1701]

it doesn't matter that stupid people exist, all that matters is that it is possible to test theories against reality, that is a tenant of science. Mostly theories in science are tested by other scientists, but anyone with the motivation can do it.

Will is important, but no less so than is wherewithal.

If an economics, there does not exist any well tested overarching rigorous theory, there is only a set of tendencies and all sorts of pet theories that people put forward. Well accepted in science means that the theory has been tested in repeatable experimental setups, it seems that 'well tested' in econ means accepted by a majority of economists. That is called a fallacy as the validity of a claim in science is not determined by the number of adherents to a claim.

As is the case with epidemiologists, the fundamental challenge faced by economists -- and a root cause of many disagreements in the field -- is the limited ability to run experiments. If one could randomize policy decisions and then observe what happens to the economy and people’s lives, one would be able to get a precise understanding of how the economy works and how to improve policy. But the practical and ethical costs of such experiments preclude this sort of approach. (Surely we don’t want to create more financial crises just to understand how they work.)

Nonetheless, economists overcome these challenges by developing and using modeling tools to obtain compelling answers to specific policy questions. In previous decades the most prominent economists were typically theorists like Paul Krugman and Janet L. Yellen, whose models continue to guide economic thinking. Today, the most prominent economists are often empiricists like David Card of the University of California, Berkeley, and Esther Duflo of the Massachusetts Institute of Technology, who focus on testing old theories and formulating new ones that fit the evidence.

This kind of empirical work in economics might be compared to the “micro” advances in medicine (like research on therapies for heart disease) that have contributed enormously to increasing longevity and quality of life, even as the “macro” questions of the determinants of health remain contested.

Consider the politically charged question of whether extending unemployment benefits increases unemployment rates by reducing workers’ incentives to return to work. Nearly a dozen economic studies have analyzed this question by comparing unemployment rates in states that have extended unemployment benefits with those in states that do not. These studies approximate medical experiments in which some groups receive a treatment -- in this case, extended unemployment benefits -- while “control” groups don’t.

These studies have uniformly found that a 10-week extension in unemployment benefits raises the average amount of time people spend out of work by at most one week. This simple, unassailable finding implies that policy makers can extend unemployment benefits to provide assistance to those out of work without substantially increasing unemployment rates.

Other economic studies have taken advantage of the constraints inherent in a particular policy to obtain scientific evidence. An excellent recent example concerned health insurance in Oregon. In 2008, the state of Oregon decided to expand its state health insurance program to cover additional low-income individuals, but it had funding to cover only a small fraction of the eligible families. In collaboration with economics researchers, the state designed a lottery procedure by which individuals who received the insurance could be compared with those who did not, creating in effect a first-rate randomized experiment.

The study found that getting insurance coverage increased the use of health care, reduced financial strain and improved well-being -- results that now provide invaluable guidance in understanding what we should expect from the Affordable Care Act.

Even when such experiments are unfeasible, there are ways to use “big data” to help answer policy questions. In a study Dr. Chetty, Friedman and Rockoff conducted, for example, they analyzed the impacts of high-quality elementary school teachers on their students’ outcomes as adults. One might think that it would be nearly impossible to isolate the causal effect of a third-grade teacher while accounting for all the other factors that affect a child’s life outcomes. Yet they were able to develop methods to identify the causal effect of teachers by comparing students in consecutive cohorts within a school. Suppose, for example, that an excellent teacher taught third grade in a given school in 1995 but then went on maternity leave in 1996. Since the teacher’s maternity leave is essentially a random event, by comparing the outcomes of students who happened to reach third grade in 1995 versus 1996, one can isolate the causal effect of teacher quality on students’ outcomes.

Using a data set with anonymous records on 2.5 million students, they found that high-quality teachers significantly improved their students’ performance on standardized tests and, more important, increased their earnings and college attendance rates, and reduced their risk of teenage pregnancy. These findings -- which have since been replicated in other school districts -- provide policymakers with guidance on how to measure and improve teacher quality.

These examples are not anomalous. And as the availability of data increases, economics will continue to become a more empirical, scientific field. In the meantime, it is simplistic and irresponsible to use disagreements among economists on a handful of difficult questions as an excuse to ignore the field’s many topics of consensus and its ability to inform policy decisions on the basis of evidence instead of ideology.

econ is not like medicine at all, even if you could run experiments they would not be repeatable due to the complexity and randomness of human behavior. bacteria and bodies are not nearly as unpredictable as people.

You act as though all these studies, which are merely biased social correlations and not really free market econ, are infallible. So a bunch of smart economists get together and arrive at a policy solution and voila! spoken like a true zealot leftist thinking government can guide us to a golden future, ignoring the mountain of policy failures right in front of your nose.

I could list an infinite number of times your religion has failed, but just to name a few- the failure of policy on the housing problem in 2008, the failure of obamacare cost projections, the failure of obamcare to save me money, the failure of fed policy to achieve escape velocity, the failure of the war on poverty, the gfailure of the US education in inner cities, .....

BUT you are trying to avoid my main point, that equilibrium does not exist, you seem to have nothing to say but regurgitating what your textbooks say

 

[320 Years of History]

you are trying to avoid my main point, that equilibrium does not exist, you seem to have nothing to say but regurgitating what your textbooks say

No, I'm not. I showed you that the equilibrium price does exist. I guess that's just something else I wrote or linked to and that you didn't read.

 

[NCC1701]

you are trying to avoid my main point, that equilibrium does not exist, you seem to have nothing to say but regurgitating what your textbooks say

No, I'm not. I showed you that the equilibrium price does exist. I guess that's just something else I wrote or linked to and that you didn't read.

You post only what you have been taught and other links, you can't seem to think beyond the textbook. You should have no problem telling me exactly why my much more precise definition is invalid, why does depth of market never vanish?

 

[320 Years of History]

You should have no problem telling me exactly why my much more precise definition is invalid, why does depth of market never vanish?

You should have no trouble supporting your position with the charts and graphs and formulas that would give it teeth. Yet you've not presented so much as one of them. Have I presented any graphs, or linked to the math that shows it to be so? Yes, I have. So, put up or shut, but either way, stop wasting my time by responding with your childish remarks.

 

[NCC1701]

You should have no problem telling me exactly why my much more precise definition is invalid, why does depth of market never vanish?

You should have no trouble supporting your position with the charts and graphs and formulas that would give it teeth. Yet you've not presented so much as one of them. Have I presented any graphs, or linked to the math that shows it to be so? Yes, I have. So, put up or shut, but either way, stop wasting my time by responding with your childish remarks.

why would someone with any knowledge of econ need a link or plot for such a simple concept as depth of market? that is like saying I need to link to an explanation of long division. I am putting up, I defined equilibrium precisely and nothing you have posted even comes close to addressing it and the fact it refutes your simplistic notions.

your supply-demand curves are simplistic, they are econ 101 and nothing more than standard crap

 

[Boss]

I can assure you that we don't need to agree upon the existence of one or more downsides for them to exist.

We don't have to agree but the same argument could be presented for Santa Claus. 1) Every year on the news, they show the radar tracking his sleigh. 2) Most kids believe Santa is real. 3) You can go to the mall and sit in Santa's lap. So there... I've proven Santa exists. You don't have to agree.

So far, even with laisse faire, you have not done that.

Insofar as you think that's so, I can tell you've not read all the linked content in my posts.

Well I don't think anyone could read the entirety of the volumes you've copied and pasted into this thread. I watched the video of Friedman defending free market capitalism and I easily shot down the three so-called "cons" presented for laissez faire capitalism... even though our free market system doesn't permit laissez faire.

I'm still waiting for you to show me some tangible downsides to our free market capitalist system. Opinions are great and wonderful but they're not facts. You can copy and paste page after page of other people's opinions, they are still not ever going to be facts. In the meantime, one verifiable and certified fact remains true... Our free market capitalist system is responsible for lifting more people from poverty and creating more millionaires and billionaires than any economic system man has ever created.