How Economic Gobbledygook Divides Us
I think I can sympathise with people being distrustful of economics and finance (I say this as someone who works in the industry). When I read what economists have to say about free trade, for example, it makes me incredibly skeptical.<p>I admit I&#x27;m not up to date with the latest graduate-level economic models. But I have read about Ricardian comparative advantage. When I looked into the assumptions behind that model, I realised they were utter nonsense. In turn, that made me reluctant to believe anything else that economists wrote on the subject.<p>The same thing happened with banking. The standard macro model where banks lend out central bank reserves with the overall constraint on credit creation being 1&#x2F;(reserve requirement) is kinda-sorta what happens, but the details are all wrong. As far as I can tell, economists don&#x27;t want to change the details of this story because then they have to re-write another part of their theory (IS&#x2F;LM), and that forms the keystone of a lot of standard theory.<p>To summarise, I haven&#x27;t seen much from academic economics that inspires confidence. So why should I trust them?