The Return of Depression Economics
Paul Krugman
I read this eleven years ago (12-Oct-2022). I read Krugman for professional reasons. I am not an economist, or a banker, or anyone who has a professional need to understand the currents of money running through the world. (That is to say, no more than everyone else.)
However, I do build models. By that I mean mathematical models -- simplified representations of real things that are precise enough to allow mathematical representation and make predictions. Krugman's singular talent as an economist is his ability to produce tiny little models that allow one to understand economic reality with gem-like clarity. He also writes with a similar clarity about modeling.
Most people misunderstand the nature and purpose of models. It is not the job of a model to be accurate, or to be right. It is not a defect of a model that it simplifies reality. In fact, simplifying reality is the PURPOSE of a model. That's why we call them "models". The goal of a modeler is to find the simplest (mis)representation of a real problem that catches the essence of what's going on.
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