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site address: newarthurianeconomics.blogspot.com/2014/11

site title: The New Arthurian Economics: November 2014

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am and other inforum software after downloading this file run it by double clicking on it or by typing its name at a dos prompt do this in a temporary directory one of the files that will be extracted is setup exe next run this setup program and the installshield session will begin this will load the software into the default location of c pdg see the readme files that are included in the installation for further instructions so far so good next run setup exe the installshield wizard a pretty picture of a house or maybe the building that houses inforum comes up in the installshield wizard after clicking next a couple times a readme file comes up this is not like something that i might throw together myself it is all very professional trustworthy 307 file s unzipped successfully when you run setup exe you get those 307 files okay first you download a file named pdg exe and unblock it then you run it and wherever you run it by default it creates a folder named pdg and it puts a handful of files in there including setup exe it wanted to extract to c root c and this time i let it here is the result a handful of files including setup exe in a pdg folder then i ran the setup exe then you run setup exe and by default it creates a pdg folder in the root and puts 307 files there including g7 exe the file you want i let it install in c and here is the result of that the installed files are in a pdg folder which is in c it works if you let it oh good windows vista is given as an example of the environment you might be using for g7 the first stuff i read on this a few days back said windows xp or 7 or 8 but didn t mention vista so far so good then the readme says you have to add c pdg the path to where g7 will be installed to the windows path variable i did that right away because i wouldn t remember to do it after the installation is complete the instructions are right there in the readme and they are excellent i didn t have any question in any step of the process when they tell you to click ok they also tell you which window you should be in at the moment and i was in that window every time i think that s the best computer instructions i ever saw the instructions are very good my problems arose because i didn t trust them and i tried to do things to prevent problems my problems arose from my effort to prevent problems sad but true oh i m gonna quote this bit for later to employ some of the newest features in g7 your system must have an installation of the microsoft vc 2005 redistributable package you can find a copy of the vc installer under c pdg vc installer run the installer before attempting to run g7 run the installer before attempting to run g7 but after i install g7 which i didn t get to yet i m still reading the readme okay i m done with the readme there are some questions related to installation i just accept the defaults unless i see something odd i see something odd the installshield wizard s destination folder window by default will install g7 to the root directory c yeah and that is okay installshield will create the pdg folder in the root directory and that is what i want and will put all the installed files into the new pdg folder it will work fine it you let it leave installshield the default path c and you re good i clicked next the typical setup type installs everything that s the default and that s what i want now click install start 5 12 am after a moment the activity begins oh done at 5 14 readme yes yeah this is the same readme file that i read before i had to do something run the installer for vc okay now i can close the temp folder and the temp pdg folder and open c pdg vc installer is there it installs quickly but then there is a long delay while it says time remaining 0 seconds but the window closed while i was typing this okay close the vc installer folder close the readme window close the control panel window where i add pdg to the path now i don t know what to do run the thing i guess in the gdp folder i double clicked on g7 exe and two windows opened it s a demo the one window is the demo and the other is the script for the demo it looks like but nothing is happening in the script i see things like when you are done reading click ok but they don t show up in the demo maybe i have to run it i click the triangle symbol in the demo window menu the right pointing triangle the thing runs i get a paragraph of text and a when you are done reading click ok message okay posted by the arthurian at 6 30 am 1 comments monday november 24 2014 the first section of chapter 1 does not require the use of computers today s title is a quote from the craft of economic modeling part 1 pdf by clopper almon i take the quote to mean that i don t have to begin by getting into the modeling software they call g7 i take it to mean i can start with a spreadsheet not pencil and paper and slide rule page six of the craft presents table 1 1 a table of data to use for the first simulation for the first model i mean ten columns of numbers most of them are incomplete the first column which is complete contains the numbers 1 thru 24 in order it is labeled line meaning row number but i take it to represent years 1 thru 24 of the simulation i m going to create three other columns are also complete each with 24 values here we have numbers that are predetermined and invariant regardless of how the simulation works out these complete columns hold exogenous values those values don t depend on the outcome of the simulation in each of the six remaining columns only the first few numbers are filled in these are starter values a lot of them are used by the calculations of the model used by calculations to fill in the blanks where numbers are not given the calculations produce endogenous values if things go a little differently in the simulation if you change an exogenous value or if you change a calculation say the endogenous numbers will probably all change when i put the numbers into a spreadsheet i switched over to calculations as soon as i could that way i could compare my calculations to some of the givens and check my work in the zoho spreadsheet i show the numbers in blue if i used given values and black if i used calculations the table of numbers starts just below this graph check my work i was expecting my graph to come out like the one on page 5 but i only got two growth spurts they got five i checked my work and didn t see any mistakes oh there were mistakes but you look at the graph and see the date when it seems to go crazy and then you check your calculations on the rows around that date and you fix em before you put it on your blog i think i got all the mistakes but if you find anything fishy let me know i m assuming the page 5 graph was generated from different data and that s why the graphs don t match if you create the model yourself do let me know how it comes out note when you enter the equations it s easy to use the wrong column it s easy to confuse spreadsheet columns with economic data category columns for example the last spreadsheet column used here is column j which contains economic data column y disposable income it s a little messy keeping it straight but if you don t do it right you ll know because your graph won t look right this series of posts began on 18 november 2014 posted by the arthurian at 4 00 am 0 comments sunday november 23 2014 why to speak of cause and effect in economics one must have in mind some kind of model it may be an entirely subconscious model or a model spelled out in theory but never quantified or tested or an explicit quantified model that has been subjected to careful testing and scrutiny i need hardly add in which sort i have the greater confidence clopper almon posted by the arthurian at 4 00 am 0 comments friday november 21 2014 columns in a spreadsheet go up and down like columns in a building rows go across following up on the post of 18 november when i picture an economic model i picture doing it in a spreadsheet i need a column for year one for gdp one for debt one for addition to debt and stuff like that whatever it turns out that the calculation seems to need and then make a row for each year of the model s life i plug in a few numbers on the top row then fill the rest of the first couple rows with calculations and that s it i copy my last completed row down to the rows below for each year of the model s life 50 years maybe the trick is to plug in the right calculations those calcs want to mimic the actual relations between gdp and debt and additions to debt and stuff or what i imagine those relations to be you know if we spend a little less we save a little more this year but our reduced spending could affect gdp next year those kinds of relations when the bug bites i ll set up a spreadsheet like that and mess with it for a while changing calculations adding columns for new quantities and looking at graphs of the resulting data i never manage to get graphs that mimic graphs of economic data so i play with it for a while then set it aside after i wrote the notes above i went and read the first few pages of clopper almon s the craft of economic modeling actually clopper says the first section of chapter 1 does not require the use of computers i printed out those six pages so i could hold them in my hand looking at the equations like c 6 y 1 35 y 2 and q c i g x m where c is consumption and q is output it occurred to me that each of the equations in the model could fit to a column of my spreadsheet you copy the equation down the cells of the column to get each year s number oh you leave out the q to the left of the equal sign and you put the equation in the column that you have labeled q do you know how long it took me to figure that out so each of the equations in a model can be a column in a spreadsheet understanding this helps me understand economic models what i ve been doing for all these years is making a column for each variable i want to calculate and then fudging the equations without ever really getting to look at the equations i would start out with something that made sense to me and keep filling in blanks until i had two or three rows worked out then copy the last row down to represent 50 years or so and then graph it then i d look at the graph decide it didn t look right and start tweaking my equations first it would be adding columns to get more variables and then working those variables into calculations and copying them to the rows below then it was things that made less sense but might have some bearing after a while it would be acts of desperation just trying to come up with numbers that would produce a graph i could live with and then i d put the thing aside for a while i think it s probably better to pull out the equations so you can look at them like clopper does like i always see when somebody is describing a model but at least now i know if there s two equations i need two columns in a spreadsheet for variables if there s six i need six no no i m not going to work only in spreadsheets i want to download the free g7 software and learn how to use it but i have to get there at my own pace and i have to start with what i know spreadsheets it is then posted by the arthurian at 4 00 am 0 comments tuesday november 18 2014 how to understand an economic model so i finally googled how to understand an economic model something i really need to understand it was the article of the week at reddit that drove me to it i didn t read the linked article just the comments on it at reddit integralds lays out an overview of growth theory of the development of growth theory what standerby calls a timeline of thought it s easy reading just a summary of developments but it s impressive i didn t even click on any of the links it wouldnt do me any good every time they start laying out a model my brain becomes impenetrable said to myself i need to know how to understand an economic model next thing i knew it was googled the fourth item in the google results and the first one i hadn t been to before was the craft of economic modeling part 1 pdf 149 pages by clopper almon here s two bits of it from the intro simply put an economic model is a set of equations which describe how the economy or some part of it functions in my view a model should incorporate and test our understanding of how the economy works its equations should make sense and it should be possible to test how adequate our understanding is by running it over the past and seeing how well it can reproduce history by changing some of its assumptions and rerunning history with the changed assumptions it is possible to analyze the effects of policies finally it should be useful not only for policy analysis but also for forecasting by studying the errors of the forecast the builder of the model may hope to improve his or her understanding of the economy some of the equations in our models have constants which describe the behavior of firms consumers or other economic agents these constants often called parameters must somehow be estimated the most frequently used way is by choosing them so that the equation describes accurately the behavior of those agents in the past thus estimating the parameters is just a way to sum up the lessons of the past to forecast the future or examine how the past itself might have been different had different decisions been made a large part of this book is about how to do that yeah i have to read this i know 149 pages usually if the page count is more than a single digit i start to worry but i have to read this oh yeah one more thing the computer software the g regression package version 7 3 referred to as g7 and the build model builder are comprehensive easy to use programs that run under windows xp and windows 7 or 8 they are designed for work with time series data public domain versions accompany the book or are available via internet www inforum umd edu where thousands of economic time series are also available as data banks for g7 assembling equations into a model requires the use of the borland c compiler which is also available for free download oh my posted by the arthurian at 5 20 am 0 comments monday november 17 2014 an extremely persistent slowdown in long run growth rates since the 1970s gavyn davies from his blog at ft note davies two here links didn t work for me so i disabled them update 13 december 2014 apparently davies links did work i just now found several copies of two pdf files in my downloads folder oh well three of my colleagues at fulcrum have been examining the behaviour of long run gdp growth in the advanced economies using developments of dynamic factor models to produce real time estimates of long run gdp growth rates see the summary paper here by juan antolin diaz thomas drechsel and ivan petrella and the more academic version here the results graph 1 show an extremely persistent slowdown in long run growth rates since the 1970s not a sudden 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