Economics is the science of human action, or, to be more precise, economics is about the logic of human action.
To give some examples: Human action, which is always the action of an individual, is purposeful; action requires means to attain goals; means are scarce; human action presupposes the category of means and ends, that is causality; time is an indispensable means for action; human action implies time preference and thus the originary interest rate; the law of marginal utility is also logically implied in the statement "Humans act".
An economic theory in which human action does not take time, or in which human action is not constrained by definite time preference and a positive originary interest rate, can be dismissed as being logically false.
The reason why there are no such behavior constants is a logical one: If the external factor X causes certain action, we would be in a position to forecast today human action in the future - and again, we would thereby contradict the logical conclusion that humans have learning ability: If we know today how we will act in the future, we have to assume that we cannot, and do not, learn along the way.
Economics - if and when rightfully understood as the logic of human action - does not, and cannot, provide you with insights predicting future human action.
From what we have outlined earlier we can know for sure that "Mainstream" economists will fail in the effort to forecast the future and that a significant number of investors will get disappointed: Economics as a science cannot predict how humans will act, it cannot quantitatively forecast how economic magnitudes will develop.
Economics is not a forecasting science, it is a reconstructing science: It allows us to understand, from the starting point of the irrefutably true statement that humans act, the qualitative consequences if humans act under certain conditions which are often uncertain from the present point of view.
https://www.zerohedge.com/news/2018-07-05/economists-wont-predict-next-crash-because-they-cant
To give some examples: Human action, which is always the action of an individual, is purposeful; action requires means to attain goals; means are scarce; human action presupposes the category of means and ends, that is causality; time is an indispensable means for action; human action implies time preference and thus the originary interest rate; the law of marginal utility is also logically implied in the statement "Humans act".
An economic theory in which human action does not take time, or in which human action is not constrained by definite time preference and a positive originary interest rate, can be dismissed as being logically false.
The reason why there are no such behavior constants is a logical one: If the external factor X causes certain action, we would be in a position to forecast today human action in the future - and again, we would thereby contradict the logical conclusion that humans have learning ability: If we know today how we will act in the future, we have to assume that we cannot, and do not, learn along the way.
Economics - if and when rightfully understood as the logic of human action - does not, and cannot, provide you with insights predicting future human action.
From what we have outlined earlier we can know for sure that "Mainstream" economists will fail in the effort to forecast the future and that a significant number of investors will get disappointed: Economics as a science cannot predict how humans will act, it cannot quantitatively forecast how economic magnitudes will develop.
Economics is not a forecasting science, it is a reconstructing science: It allows us to understand, from the starting point of the irrefutably true statement that humans act, the qualitative consequences if humans act under certain conditions which are often uncertain from the present point of view.
https://www.zerohedge.com/news/2018-07-05/economists-wont-predict-next-crash-because-they-cant
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