How can one be certain about outcomes in a complex system that we’re not really all that good at modeling? Anyone who’s familiar with the history of macroeconomic modeling in the 1960s and 1970s will be tempted to answer “Umm, we can’t.” Economists thought that the explosion of data and increasingly sophisticated theory was going to allow them to produce reasonably precise forecasts of what would happen in the economy. Enormous mental effort and not a few careers were invested in building out these models. And then the whole effort was basically abandoned, because the models failed to outperform mindless trend extrapolation — or as Kevin Hassett once put it, “a ruler and a pencil.”
Computers are better now, but the problem was not really the computers; it was that the variables were too many, and the underlying processes not understood nearly as well as economists had hoped. Economists can’t run experiments in which they change one variable at a time. Indeed, they don’t even know what all the variables are.
This meant that they were stuck guessing from observational data of a system that was constantly changing. They could make some pretty good guesses from that data, but when you built a model based on those guesses, it didn’t work. So economists tweaked the models, and they still didn’t work. More tweaking, more not working.
Eventually it became clear that there was no way to make them work given the current state of knowledge. In some sense the “data” being modeled was not pure economic data, but rather the opinions of the tweaking economists about what was going to happen in the future. It was more efficient just to ask them what they thought was going to happen. People still use models, of course, but only the unflappable true believers place great weight on their predictive ability.
Megan McArdle, “Global-Warming Alarmists, You’re Doing It Wrong”, Bloomberg View, 2016-06-01.
February 15, 2018
QotD: Computer models
January 26, 2018
June 27, 2011
“A substantial expansion of the FBI’s power to monitor innocent Americans”
Julian Sanchez on the changes to the FBI’s domestic rulebook:
The change in the rules will remove a crucial deterrent for any of the 14,000 FBI employees who might be tempted to use their government access to all kinds of databases for improper personal ends, or to flout rules prohibiting religious, racial and political profiling. This is no hypothetical concern: Shortly after the new guidelines were announced, a former CIA official alleged that the Bush administration had asked the spy agency to dig up dirt on academic and blogger Juan Cole, whose fierce criticism of the war in Iraq earned the ire of the White House.
The new manual will also give agents who have opened assessments greater authority to employ physical surveillance teams. If the FBI thinks you might make a useful informant, agents will be free to dig through your garbage in hopes of finding embarrassing trash that might encourage you to cooperate. And they will be able to do this without first having to show any evidence that you are engaged in wrongdoing.
The FBI, predictably, is downplaying the changes in its rulebook, characterizing them as “clarifications” and “tweaks.” But all these tweaks add up to a substantial expansion of the FBI’s power to monitor innocent Americans — power Congress wisely curtailed in the 1970s in light of the bureau’s ugly history of spying on political dissidents. The law set broad limits on the most intrusive investigative techniques, such as wiretaps, but the details of who could be investigated and how were largely left to executive branch regulation. As statutory restraints on surveillance have been peeled back over the last decade, Americans have been asked to rely more than ever on those internal rules to check abuses.
August 13, 2009
Sorry for the downtime this morning
My new host had some problems with the database connections this morning, resulting in a loss of access to the blog (both for you and for me . . . I couldn’t get access on the admin side either). Service appears to be back to normal now.
If you didn’t notice a problem, feel free to ignore this post.
