444 sats \ 2 replies \ @nkmg1c_ventures 7 Feb freebie \ parent \ on: Is Studying Economic Data "Doing Economics"? econ
Another way to put this would be that modern quants are using a variety of models that work and provide predictive and hopefully sometimes explanatory power, but that comes from sophisticated models that bear no allegiance to economic dogma. They're just models that survive and are useful.
That reminds me of reading about the development of artillery targeting formulas. As one might expect, they started with the simple parabolas suggested by classical mechanics, but those turned out to be incredibly inaccurate, because none of the simplifying assumptions hold. Then, they tried to add in the frictions and other factors, but that became too complicated. Ultimately, they solved it through massive trial and error, where they explored how dozens (maybe hundreds) of variables affected the shell's trajectory.
Even when all the relevant theory is precisely developed, there can still be value in doing atheoretical empirical work.
To tie it back to the original prompt, though, were all those artillery specialists "doing physics"? I think it's reasonable to say they weren't.
reply
It wasn't all totally black-box and statistical. There is a lot of analog computing with carefully calibrated theory and decades of data behind the artillery used in WWII. Lord Kelvin & early wave / Fourier analysis applications. Really interesting stuff.
But yes, you are right. I'm pretty sure the early way of doing "stats simulations" was just basically trying a bunch of stuff and recording the outcome. The two approaches are important, I think. There is a lot to be said for "American ingenuity" in WWII where the Axis powers thought Americans were absurd and often had backwards solutions to things, but hey unorthodox works
reply