Mises Wire

The Lucas Critique

The Lucas Critique

Concering  this item, perhaps Coach Schwartz isn’t familiar with the “Lucas Critique,” in which Robert Lucas demonstrated that government economic models tended to be incorrect because people change their behavior in the face of government policy?  Because Coach Schwartz will change his coaching behavior in response to what his models predict, they may be of limited usefulness (unless he has factored his endogenous responses into the model, in which case I’m really impressed).  Of course, he may also wish to consider Ludwig von Mises’ insight that mathematical models are pretty useless because there are no constants in human interrelations... Go Rams

 

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