hi /sci/ I'm having a bit of a crisis right now.
TL;DR: is all of macro and microeconomics, mathematical finance (etc.) practically pseudoscience? Is there any point in studying it, even for fun?
I love(d) the concept of the mathematical study of economics, such as supply and demand curves, the intersection of those curves, the integrals and derivatives of those curves, how they all interplayed and modeled the real world...
But a phrase from stocks/trading always stuck out in my mind, "The stock market is stochastic and fundamentally unpredictable". Then it started dawning on me that this is true of the entire economic system
Traders and economists slavishly follow economic theory as gospel when the theory only holds because it's what they believe is true. Their own belief influences the theory itself. It's a vicious cycle that has no actual basis in any kind of rigorous footing, and the rigorous footing they DO try and supply is based on "assumptions" of a "rational buyer", completely arbitrary and subjective qualifications.
It feels more and more like economists have extreme physics envy or something and are trying to justify their fields on untried mathematical bullshit to appear legitimate
I could keep going on but I think you all get my point. I've wanted to get deeper into Mathematical Finance such as stochastic calculus and stochastic differential equations, but now that I'm thinking all of this through, is there any point in putting any stock in any kind of economic theory at all?
(I'm not debating the veracity of stochastic calculus, but my primary motivation in learning it seems to have been shaken to the core).
TL;DR: is all of macro and microeconomics, mathematical finance (etc.) practically pseudoscience? Is there any point in studying it, even for fun?
I love(d) the concept of the mathematical study of economics, such as supply and demand curves, the intersection of those curves, the integrals and derivatives of those curves, how they all interplayed and modeled the real world...
But a phrase from stocks/trading always stuck out in my mind, "The stock market is stochastic and fundamentally unpredictable". Then it started dawning on me that this is true of the entire economic system
Traders and economists slavishly follow economic theory as gospel when the theory only holds because it's what they believe is true. Their own belief influences the theory itself. It's a vicious cycle that has no actual basis in any kind of rigorous footing, and the rigorous footing they DO try and supply is based on "assumptions" of a "rational buyer", completely arbitrary and subjective qualifications.
It feels more and more like economists have extreme physics envy or something and are trying to justify their fields on untried mathematical bullshit to appear legitimate
I could keep going on but I think you all get my point. I've wanted to get deeper into Mathematical Finance such as stochastic calculus and stochastic differential equations, but now that I'm thinking all of this through, is there any point in putting any stock in any kind of economic theory at all?
(I'm not debating the veracity of stochastic calculus, but my primary motivation in learning it seems to have been shaken to the core).
