The Irish Economy
Commentary, information, and intelligent discourse about the Irish economy
Central Bank conference details here.
speaking of federal banks and models,
Any comments on the FRB/US, the ECB DSGE “micro”, eviews?
Is it worth to buy a licence?
When I read the manuals to the FRB/US, the ECB DSGE (Smets wouters 2007) a few years ago,
I wondered a little bit, and got scared a little bit, that this would be the base of decisions in the ECB
Session 3: Can Financial Statistics be Misleading? Focusing on User Requirements.
Misleading estimates? But, I thought that was what some ‘estimates’ were for – to mislead dopey folk. Unless one has access to the original ‘raw’ data, rather than the minced, massaged and compressed baloney, no valid conclusions can be drawn. “Garbage in, garbage out!”
It seems clear (well, to me at least) that the Performance Characteristics* of economic quantitative determination methods are shot-through with quite iffy assumptions, hence cannot produce reliable estimates.
Yet these economic (and financial) estimates are accepted and conferred with a faith-like belief, that they are a valid representation of reality (they are used to determine policy), when in fact, they are no such thing. They are actually meaningless (in a statistical sense).
* Used to establish and show that a quantitative measurement process is in Statistical Control.
somewhat off topic, but it fits your “faith-like belief” claim
and what is describing the statements of > 90% of economists as well
@ francis: Thanks for that. Very enlightening! Not ‘off-topic’ at all.
I recall that I once accused a very bright colleague of being a Monorail Thinker and of being as thick as Yak sh*t! Prof Kahan just says it more politely – Identity-Protective Cognition. I wish I had known!
Now I can politely accuse my detractors and critics of deploying IPC, rather than calling them gobshites! Thanks again.
re: Central Banks and statistics:
Section 6.1 of the ECB Annual Report 2013.
“The liquidation of the Irish Bank Resolution Corporation (IBRC) raises serious monetary financing concerns. These concerns could be somewhat mitigated by the disposal strategy of the Central Bank of Ireland.”
Allow me to mention one very definite instance of monetary financing, that the ECB failed to bring to our attention in its annual report.
The ECB made approx 1.3 billion in profit in 2013 from its SEP and covered bond purchase programs. This profit was handed back to the CBs in relation to their ‘capital key’, but why?
I assume that most of this profit came from holdings of Greek, Irish, Portuguese and Spanish debt. If so why are other countries being financed by the profit made on the peripherals.
Germany, for instance, will get approx 18% of the profit, about 250 million.
France will get approx 12% or 150 million.
Is this not monetary financing?
The core countries have a nice little earner going for themselves, a nice little monetary financing earner.
There is a very strong argument that any profits made on these programs should go back to the country whose bonds were purchased. ANy argument to the contrary, effectively concedes that the ECB is in the business of making profits for its shareholders, i.e monetary financing.
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