Test the assumptions

Reader comment on: More on Blinder-Zandi

Submitted by Fred Van Bennekom (United States), Aug 1, 2010 13:59

The real value that economists can bring to the dismal science in the next few years is to test the assumptions built into the Blinder-Zandi model, as well as the CBO and Obama models. Is the Keynesian multiplier what the president and his advisors have presented? We don't likely have enough history yet to perform those tests, but that brings to bear the problem of this paper and its presentation. It purports to show the impact of Keynesian stimulus, but it doesn't test the model with current empirical data. So its claims are as good as its untested assumptions.

President Obama did this in April of 2009 (or thereabouts). He said, "The stimulus is already working," claiming that it had created or saved XXX jobs. He made it sound like that statement was based on empirical data, but it was simply the output of the models his economic advisors ran.

What's the right word to describe assertions, based on models, presented as fact?

Note: Comments are moderated by the editor and are subject to editing.

Other reader comments on this item

Comment on this item