I’m aware this is kind of hard to justify, but I’m basically an apologist on this one. I think he was mostly right and just exaggerated the measurable magnitude. It’s just so damn hard to come up with examples that are not only true and illustrative and compelling and not confusing, but also very measurably true. I do wish he had provided a more justifiable core example and overstated the result less, but I do basically the same when I’m trying to make a point. On my list of metrics I think he satisficed basically fine—I can’t think of any better examples off the top of my head from pre-COVID.
[ETA: someone asked why I thought the effect size was more than 0, which is a good question that I was trying to dodge… Here’s my attempt at some justification.
First: the “reality drives straight lines on graphs” thing. The line of your economy growing stays straight because you keep doing things to make the economy keep growing. Every time someone does something to boost the economy, that line gets a little straighter. If they didn’t fix the money supply they probably would have started growing less, but they did fix it because it was the next bottleneck and that’s how lines stay straight. I’ve seen a lot of times where an intervention that has to have a clear effect by any model of the world just doesn’t show a clear effect on graphs. So at this point I’m not that convinced by being unable to pick signal out of the noise.
Second, as someone else pointed out, they once again didn’t print enough money. So while Eliezer did exaggerate to say that they had actually fixed the problem and seen his preferred result, I think he was still directionally right: they did a small intervention, it helped some, and doesn’t really show up because they didn’t do enough. It wasn’t a Volcker situation where he really drilled it into people.
Third, least convincingly, I’m just schizo enough to be able to eyeball those graphs and say sure, does look a bit like prime LFPR was up faster. And after a crunch you’re supposed to see catch-up growth, and in this case it does seem like the catch-up growth of Japan was slower than I’d expect and the post-catch-up was equally fast but relatively faster (compare Germany’s RGDP, the first non-US country I looked at). Also, I hear there was some sort of economic problem around 2014-2015 maybe? Anyways this is of course in the context of point 1, where normally it’s hard to see anything on a graph.
Fourth, again in the context of point 1, in cases like this I’d lean more on models and historical context for what we know must be going on, rather than actually expecting to see the results clearly in any given case. And I feel pretty confident that increasing the liquidity available in a faltering economy HAS to increase GDP—like, decreasing it surely decreases GDP, right? So by the reversal test…]
I’m aware this is kind of hard to justify, but I’m basically an apologist on this one. I think he was mostly right and just exaggerated the measurable magnitude. It’s just so damn hard to come up with examples that are not only true and illustrative and compelling and not confusing, but also very measurably true. I do wish he had provided a more justifiable core example and overstated the result less, but I do basically the same when I’m trying to make a point. On my list of metrics I think he satisficed basically fine—I can’t think of any better examples off the top of my head from pre-COVID.
[ETA: someone asked why I thought the effect size was more than 0, which is a good question that I was trying to dodge… Here’s my attempt at some justification.
First: the “reality drives straight lines on graphs” thing. The line of your economy growing stays straight because you keep doing things to make the economy keep growing. Every time someone does something to boost the economy, that line gets a little straighter. If they didn’t fix the money supply they probably would have started growing less, but they did fix it because it was the next bottleneck and that’s how lines stay straight. I’ve seen a lot of times where an intervention that has to have a clear effect by any model of the world just doesn’t show a clear effect on graphs. So at this point I’m not that convinced by being unable to pick signal out of the noise.
Second, as someone else pointed out, they once again didn’t print enough money. So while Eliezer did exaggerate to say that they had actually fixed the problem and seen his preferred result, I think he was still directionally right: they did a small intervention, it helped some, and doesn’t really show up because they didn’t do enough. It wasn’t a Volcker situation where he really drilled it into people.
Third, least convincingly, I’m just schizo enough to be able to eyeball those graphs and say sure, does look a bit like prime LFPR was up faster. And after a crunch you’re supposed to see catch-up growth, and in this case it does seem like the catch-up growth of Japan was slower than I’d expect and the post-catch-up was equally fast but relatively faster (compare Germany’s RGDP, the first non-US country I looked at). Also, I hear there was some sort of economic problem around 2014-2015 maybe? Anyways this is of course in the context of point 1, where normally it’s hard to see anything on a graph.
Fourth, again in the context of point 1, in cases like this I’d lean more on models and historical context for what we know must be going on, rather than actually expecting to see the results clearly in any given case. And I feel pretty confident that increasing the liquidity available in a faltering economy HAS to increase GDP—like, decreasing it surely decreases GDP, right? So by the reversal test…]