Wednesday 15 Aug 2018 | 12:54 | SYDNEY
Wednesday 15 Aug 2018 | 12:54 | SYDNEY

Economic modelling, redux


Mark Thirlwell

1 July 2010 10:03

Daniel Davies explains his superior approach to modelling monetary economics:

I think we can all agree that things will go better if all currently working monetary economists stop teaching their models to undergraduates and instead adopt my modelling approach:

  1. A bank is a box, with "BANK" written on it
  2. A central bank is a box with a pitched roof and lines on the front representing the fascia of the Bank of England
  3. The household sector is a stick man
  4. The industrial sector is a box with a sawtooth roof
  5. Long term savings are a stick figure with a top hat

With these basic concepts, plus sufficient scribbled arrows, more or less any problem in monetary economics can be solved, up to the level of accuracy of any other model.

Brad Delong develops the concept, and Eric Rauchway contributes as well. 

I enjoyed it, anyway.